What is RTI and how do I report it to HMRC?

The pain: a three-letter acronym that turns up the day you hire

You set up payroll, or you start paying yourself a director's salary, and somewhere in the small print is the term RTI. Nobody explains it. The guidance assumes you already know. And the consequences sound scary — late RTI submissions can mean penalties from HMRC.

So you're left with a vague, low-level worry: there's a thing called RTI, it has deadlines, and if you get it wrong you get fined. That's a horrible way to run a business.

Let's fix that. RTI is genuinely simple once someone tells you what it actually is.

What RTI actually means

RTI stands for Real Time Information. It's the system HMRC uses to find out about your payroll — as it happens, rather than once a year.

Here's the old world and the new world, side by side, because the contrast is the whole point.

Before RTI, employers ran payroll all year and only told HMRC the full picture at year-end. HMRC was always months behind reality.

With RTI, you tell HMRC every single time you pay someone. Each pay run, you send a report saying "here's who I paid, here's the gross, here's the tax and National Insurance I deducted." On or before the day the money lands.

That's it. RTI is just the rule that says: report each payday to HMRC, in real time, on or before payday. The "real time" is why it's called Real Time Information.

The two reports you might send

RTI isn't one form — it's mostly two, and a small business usually only deals with one of them regularly.

The FPS — Full Payment Submission. This is the main one. Every pay run, the FPS tells HMRC what you paid each person and what you deducted (PAYE Income Tax and National Insurance). You send it on or before payday, every time. If you pay monthly, that's twelve FPS submissions a year. One employee or fifty — same report, same rule.

The EPS — Employer Payment Summary. This is the occasional one. You send an EPS to tell HMRC things the FPS can't — for example, that you're reclaiming certain amounts, or that you paid no one at all in a given period (a "nil" report so HMRC doesn't think you've simply forgotten). Many one-person companies send an EPS only now and then, or not at all.

For most founders with one employee or a single director's salary, RTI in practice means: file an FPS, on or before each payday. That's the heartbeat.

Why HMRC cares so much about "on or before payday"

The timing is the part that catches people, so it's worth being clear.

HMRC wants the FPS on or before the day you actually pay the person — not a few days later when you get round to it. File it late and you risk a penalty. Do it repeatedly and the penalties stack up.

It's not meant to be a trap. The logic is that the tax system (and things like Universal Credit) now run on real-time pay data, so HMRC needs to know what you paid roughly when you paid it. But for a busy founder, "every payday, on time, or get fined" is exactly the kind of recurring deadline that's easy to miss when you're doing everything yourself.

Rates, thresholds and the finer rules around RTI can change, so confirm the current requirements and any penalty details with HMRC. The shape of the obligation — report each payday, on or before — is the stable bit.

The hard way today: remembering to file, every single time

Doing RTI by hand is less about difficulty and more about relentlessness. It has to happen every pay run, forever, on time.

HMRC's Basic PAYE Tools. Free desktop software that can generate and submit the FPS. It works, but you have to install it, run your pay, and remember to submit before payday — manually, every month. Nothing nudges you.

A spreadsheet. A spreadsheet can calculate pay, but it cannot file RTI. Submissions have to go through HMRC-recognised software. So the spreadsheet crowd ends up doing the maths in one place and the filing in another, which is exactly where mistakes and missed deadlines creep in.

Xero, QuickBooks or a payroll add-on. These can file RTI, but payroll is often a separate paid module, with its own setup, and you still have to remember to run the pay and approve the submission each period. The software can file — but you're still the one who has to press the button on time.

The pattern is familiar: the tools can do the work, but you are the reliability layer. And humans, especially founders juggling everything, are not a reliable monthly deadline.

How it's automatic in Ledgers

Ledgers handles RTI as part of the pay run, so the report and the deadline stop being your problem.

The FPS is generated for you. When you run pay, Ledgers builds the Full Payment Submission from the numbers it just calculated — gross, PAYE, NIC, net — so there's nothing to re-key.

It files on or before payday, automatically. This is the whole point. Ledgers submits the RTI report to HMRC as part of the pay run, on time, so you're not the human standing between your payroll and a penalty.

Nil and occasional reports are handled too. Because Ledgers knows your pay schedule, the awkward edge cases — like telling HMRC you paid no one this period — don't get silently forgotten.

It all lands in your books. The pay, the tax owed to HMRC and the RTI submission are one connected event. Your wage costs hit your P&L, and what you owe HMRC sits clearly on your balance sheet — no separate payroll tool to reconcile against your accounting.

Because the ledger is explainable and nothing disappears, you can also look back and see exactly what was reported and when. If HMRC ever asks, the answer is right there.

What you'd actually see and do

In Ledgers, RTI is something you notice happening rather than something you operate:

1. Run pay (one employee or several). Ledgers calculates PAYE and NIC.
2. Approve the pay run.
3. Ledgers files the FPS to HMRC on or before payday, and marks it done.
4. You see a clear record that the submission went through — and what you now owe HMRC.

No installing software, no separate filing step, no diary reminder reading "FILE RTI OR ELSE." The report goes when it should, and you get on with running the business.

RTI is just "tell HMRC each payday" — but remembering it every month is the hard part. In Ledgers, the Full Payment Submission is built from your pay run and filed to HMRC on or before payday, automatically, so you're never the missed deadline. See your numbers without learning accounting → start free.

New to payroll altogether? Start here: How to run payroll for one employee (or just yourself) →

Run your whole back office without the bookkeeping: Run your books without becoming a bookkeeper →

Frequently asked questions

What does RTI stand for?

Real Time Information. It's HMRC's system for collecting payroll data each time you pay someone, rather than once a year. You report what you paid and what you deducted, on or before payday.

What is an FPS?

A Full Payment Submission — the main RTI report. It tells HMRC who you paid, the gross pay, and the PAYE and National Insurance you deducted. You send one on or before each payday.

When do I have to submit RTI?

On or before the day you actually pay your staff — every pay run, not annually. Filing late can lead to penalties, so confirm the current rules with HMRC.

Do I need RTI if I only pay myself a director's salary?

Yes. If your company runs any salary through payroll, you need to file an RTI report on or before payday, even if the tax and National Insurance are zero.

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