Introduction

The Basic Pay As You Earn (PAYE) Tools (BPT) is software that you download onto your computer. It’ll help run your payroll throughout the year. It’s designed for employers who have 9 or fewer employees and has been updated so you can use it to work out payroll deductions and then report payroll information online in real time. It is not designed for agents or payroll bureaus acting for multiple employers, but if it is used in this capacity it will become slow to open and sluggish when moving between screens. If BPT is used in this capacity users must understand that there is no in built functionality for users to separate data for individual employers.

BPT will:

• record your employees’ details

• work out and record your employees’ pay, tax, National Insurance contributions and any student or postgraduate loan deductions every payday

• generate the payroll data that you need to send to HMRC in real time, including starter and leaver information

• produce an ‘Employer Payment Record’ that shows you how much you need to pay HMRC

• help you to work out statutory payments such as Statutory Sick Pay (SSP) and Shared Parental Pay (SHPP) using the calculators provided

• allow you to claim the National Insurance contributions Employment Allowance (read the guidance before claiming this allowance from April 2019.)

This guide will take you through the process of downloading, installing and setting up BPT.

The screen shots in this guide are the main ones you’ll need to know about, but does not include them all as there are some that most employers will not use because they apply to more unusual circumstances.

Once you’ve completed the steps in this guide you’ll be ready to start using BPT.

At that stage, you may want to read and maybe print the user guide All users: Using Basic PAYE Tools.

Step 1: Register as an employer with HMRC and enrol to use online services

To start using BPT you must have:

1) registered as an employer with HMRC

If you’ve not yet registered with HMRC as an employer, go to How to register as an employer.

If you’re already registered, you’ll have an Employer PAYE reference and an Accounts Office reference.

2) registered and enrolled to use HMRC’s PAYE Online Services

If you have not yet done this go to Register for HMRC taxes and sign up for online services.

If you’re already registered, you’ll have a User ID and password. Your User ID is sometimes referred to as the Government Gateway User ID. If you’ve been an employer for a while, this is the User ID and password that you’ll have used for sending other employer data such as your P35 and P14 forms to HMRC online.

Step 2: Check your computer is ready to download BPT

Although dependent on the specification of the computer on which the application is operated, the user can expect to see the following behaviour when managing no more than 3 employer records on a computer with the following specification:

• user should see change from their iteration in the Graphical User Interface (GUI) within 0.5 seconds

• events that take longer than 2 seconds should display information to the user via the GUI

• events should not take longer than 5 seconds to complete

• where events take longer than 5 seconds, if possible, the application should display meaningful information as to the time left for that event via the GUI

System requirements

Supported operating system

The following operating systems are supported:

• Windows 10 and 11

• macOS version 11 ‘Big Sur’ and 12 ‘Monterey’

• Ubuntu Linux version 20.04 LTS and 21.10

Only 64-bit Intel/AMD compatible versions of these operating systems are supported.

Supported browsers

You can use the following browsers if you need assistive software support:

• Microsoft Edge (Windows only)

• Google Chrome

• Mozilla Firefox

• Apple Safari (macOS only)

Back up and restore

BPT has a default that makes automatic backups of locally held data every time the product is exited using the application GUI. This facility is also user configurable via the settings screen such as where to save backups.

Internet connection

You must report your payroll information to HMRC electronically each time you pay your employees. To do this, your computer must have an internet connection so that BPT can send your reports to HMRC. You will not need to be connected all the time and the data which is sent to HMRC is small in size so it will not be a problem if you do not have broadband. However, you’ll need to go online on a regular basis ― every time you pay your employees.

Step 3: Select the software that matches the operating system on your computer

There are 4 different links that allow you to download BPT onto your computer. The link you choose must match the operating system on your computer.

Most customers who use BPT download ‘Basic PAYE Tools for Windows’.

A few customers who use BPT download ‘Basic PAYE Tools for Mac’. This is for customers who know that their computer is an Apple Mac.

A few customers who use BPT download ‘Basic PAYE Tools for Linux’. This is for customers who know that their computer is running Linux.

To make sure that you download the latest version of the software go to Download HMRC’s Basic PAYE Tools.

From the list on the download page, click the link that matches the operating system on your computer and start downloading the tools.

Step 4: Download and install BPT

This is a step-by-step guide to downloading and installing BPT for Windows and Apple Mac users.

If you’re using Linux, you can find instructions on how to install and open the Tools in the guide Getting Basic PAYE Tools running on Linux.

The following images are of the Windows operating system and will be slightly different to the images viewed by Apple Mac users. Your operating system and choice of antivirus software can also affect how the screens are displayed. Apple Mac users may also need to amend security and privacy settings to allow software to be downloaded.

Internet Explorer

If your web browser is Internet Explorer, you’ll see a screen similar to this. Select ‘Open’.

Image showing Internet Explorer screen.

Mozilla Firefox

If your web browser is Mozilla Firefox, you’ll see a screen similar to this. Select ‘Open with…’ and then ‘OK’.

Image showing Firefox screen.

All web browsers

You’ll then see the following or a similar looking screen. Select and double click on ‘payetools-rti-1.2.1.12327…’.

Image showing payetools-rti-1.2.1.12327 checkbox.

Next, you may see the following or a similar looking screen. Select ‘run’.

Image showing Basic PAYE Tools Run confirmation screen.

Or you may see this screen. This pop-up will ask you to confirm that you want to allow BPT to make changes to your computer. Select ‘Yes’.

Image asking for permission to make changes screen.

Regardless of your computer and operating system, you’ll reach the following screen. Click ‘next’ to continue.

Image showing Basic PAYE Tools setup screen.

You need to read the license agreement and decide if you want to accept it. If you accept the license agreement, you should select ‘I accept the agreement’ and then click ‘next’ to continue.

If you choose not to accept the license agreement, you will not be able to install and use BPT.

Image showing license agreement screen.

Select ‘Standard installation’ unless you’re an advanced user or the system administrator and would like to do a ‘Custom installation’.

Then click ‘next’ to continue.

Image showing choose installation type screen.

Click ‘next’ to continue.

Image showing confirm standard installation screen.

Leave the ‘tick’ in the ‘Check for updates automatically’ box. Under no circumstances change this setting as you may miss vital updates to BPT.

The automatic setting means that if you’re connected to the internet when you open BPT, you can always have the most up to date version on your computer. Then click ‘next’ to continue.

Image showing check for updates automatically screen.

If you followed Step 2 of this guide, you’ll have already checked that you had either Adobe Reader 9 or 10 on your computer. Therefore you can click ‘next’ to continue.

Image showing request to confirm you have Adobe Reader software screen.

The next screen tells you about the need to take regular backups of your data. It’s strongly advised that you take regular backups of your payroll and store them on an external drive such as a memory stick or CD ROM as a safeguard in case your computer should be lost or broken. Once you’ve read this click ‘next’ to continue.

Image showing data backup reminder screen.

Click ‘next’ to continue.

Image showing ready to install Basic PAYE Tools screen.

The BPT will now be installed on your computer. This can take up to 10 minutes.

Image of software installation progress screen.

When the installation is complete you’ll see this screen. Click ‘finish’.

Image of installation complete screen.

Once you’ve clicked ‘finish’ the following icon will appear on your desktop. To get back to your desktop, minimise all the open pages on your computer, or use a shortcut key if you have one.

Image of Basic PAYE Tools icon screen.

Your download and installation is now complete

Go to Step 5.

BPT installation problems

If you have trouble installing BPT, try restarting your computer and run the installation again.

Some antivirus programmes incorrectly put software that you’ve downloaded from the internet into quarantine. If you’re unsure of how to retrieve a download from quarantine contact your antivirus software provider for support.

If your computer is part of a network of computers, then you may be prevented from downloading any materials onto your computer. Contact your business’ IT service for support.

Step 5: Open BPT

There are 2 ways to open BPT on your computer.

1. Double click the BPT icon on your desktop, or

2. Search for ‘Basic PAYE Tools’ in your start menu.

When you first open BPT, you’ll see the following screen.

Image of Basic PAYE Tools start page screen.

It may take a few minutes before it opens up to the following screen which is the homepage of BPT.

Image of Basic PAYE Tools Home Page.

BPT allows you to keep your payroll records in an electronic format, work out PAYE tax, National Insurance contributions and other deductions. It also allows you to report your payroll information to HMRC online, when you pay your employees.

Before you can start using BPT, you need to add details about:

• you the employer

• all your employees

Select the ‘Add an employer’ link from the menu on the left.

Image of Basic PAYE Tools home Page ― Add an employer screen.

Step 6: Add details about the employer

Image of Add details about the employer screen.

Once you’ve clicked on the ‘Add an employer’ link, the next step is to enter details about the employer. To do this, you’ll need your:

• employer name

• PAYE reference ― you’ll find this on the letter you received from HMRC in the format of 3 numbers and several alpha numeric characters

• Accounts Office reference ― you’ll find this 13 character reference on the letter you received from HMRC after you registered as an employer or on the front of your P30BC pay slip booklet from HMRC

• Corporation Tax Unique Taxpayer reference (if applicable)

• Self Assessment Unique Taxpayer reference (if applicable)

Enter the required information in the blank boxes.

Boxes with a red asterisk (*) next to them are mandatory and must be filled in before you’re allowed to continue to the next page.

If you’re unsure what to enter in a box, click on the green question mark symbols (?) to look at the help text which has more information.

When you reach the question, ‘Select the tax year of your first real time information submission using Basic PAYE Tools for real time reporting’, you should choose 2022 to 2023, where you’ll be provided with the next screen.

Image of employer 2022 to 2023 details screen.

The information entered on the previous screen will be pre-populated. You then need to provide the following year based additional information:

• your employer address

• if you’re ‘exempt from Employer Class 1 National Insurance contributions’ ― if you select this option you’ll not be able to change it, therefore, make sure you’re exempt as an employer before ticking the box ― you should have had written confirmation from the Department for Work and Pensions (DWP) regarding this matter

Once you’ve completed all of the required information, select ‘next’. You’ll be provided with an information-based screen and another next button.

Image of add employer confirmation screen.

Claiming Employment Allowance

On selection of the ‘next’ button, the process of adding an employer will then be completed. You’ll be presented with the following screen.

Image showing a screen with a warning message about eligibility to claim Employment Allowance.

This new screen includes a warning message (indicated by an orange triangle) telling you that you have not ‘indicated whether you are eligible to and want to claim Employment Allowance’ and directs you to the Employment Allowance link in the menu section on the left side of the screen. When this link is selected a new screen will appear.

Image showing screen explaining new eligibility criteria for Employment Allowance

This screen explains the new eligibility criteria which must be checked before making a claim to the Employment Allowance and has a link to a fuller explanation guide on GOV.UK. It also informs you that from April 2020 you will have to claim this allowance annually as it will not be carried forward indefinitely as it had done in the past.

When you have read the information on the screen select next to enable you move on in the process.

Image showing Employment Allowance details screen.

Note: ‘State aid rules do not apply’ should only be chosen when a business does not undertake any economic activity. For instance, some charities, community amateur sports clubs, or a person employing someone to provide personal care, may not be engaging in economic activity and therefore fall outside de minimis State aid rules. An example of this could be a small educational charity, employing staff to teach English as a second language for free in the local community. These employers are still eligible for the allowance, but it will not be classed as a de minimis State aid in these circumstances.

Most other employers do undertake economic activity, therefore de minimis State aid rules apply, and they should choose at least one of the four de minimis State aid business sectors when claiming Employment Allowance:

1. Agriculture

2. Aquaculture & Fisheries

3. Road Freight transport

4. Industrial and Other for everything else ― examples of the types of businesses choosing this option could be services or utilities, merchandising, manufacturing. For example a hair salon or restaurant, would come under this sector as they offer goods and services.

You now have to complete all sections on this screen before attempting to move on. Once complete select next.

Step 7: Add details about your employees

To set up the ‘employees’ section, you’ll need the following information about each of your employees:

• title

• first name

• middle name (if known)

• last name

• address (including postcode)

• gender

• date of birth

• National Insurance number (if known)

• passport number (if known)

• payroll ID if applicable ^{[footnote 1]}

• normal weekly hours worked - ^{[footnote 2]}

• pay frequency (how often you pay them)

• irregular employment indicator - ^{[footnote 3]}

• if they’re a director of the company (only select yes if the business is a Limited Company and the employee has been appointed as a company director)

• their start date - ^{[footnote 4]}

• the starter declaration they made if they started working for you during the current tax year

• previous pay and tax details from their previous employment if they started working for you during the current tax year and have given you form P45

• tax code (for existing employees) - ^{[footnote 5]}

• National Insurance category letter (for existing employees this will be on your payroll records) ― this is not the letter at the end of your employee’s National Insurance number, if the employee you’re adding is a director, you must select the ‘Director’s cumulative method’ of National Insurance calculation if the director is likely to reach state pension age during the year in question

• if student or post graduate loan deductions need to be made (if you’re liable to deduct student or post graduate loan payments from an employee), you’ll have received a letter from HMRC telling you which plan type your employee is repaying under

Once you have all the details to hand, select ‘Home’ from the top of the screen. From there, select the employer from the employer list.

Image showing Basic PAYE Tools home page screen.

Select ‘Manage employees’ link from the menu on the left.

Image showing Manage employees screen.

Select the ‘add an employee’ link from the menu.

Image showing Add an employee screen.

You should start by entering details of any employees who have left since the start of this tax year, then add your existing employees.

The screen requires you to make a choice about the ‘type’ of employee:

• almost all employees will be ‘current’ ― these are the people you employ today and anyone you pay an occupational pension to

• a very small number of pension providers will need to select ‘trivial commutation’

• a very small number of employers will need to select ‘Non-individual’

• if you only use BPT for an Earlier Year Update (EYU) for an employee for 2019 to 2020 tax year or earlier, select ‘Earlier Year Update only’. This function will not be available for 2020 to 2021 and going forward.

Image showing Add an employee type screen.

Enter the required employee information into the blank boxes.

Image showing add employee information screen.

Scroll down the page completing the boxes as you go remembering that those marked with a red asterix (*) are a mandatory requirement and you will not be able to move from the page until the information is provided.

When you reach the question ‘Basis for setting up employee’ you again need to make a choice from the drop-down list, click on the question mark symbol (?) for further information.

You should only select ‘New starter receiving occupational pension’ for an employee who has just started to receive an occupational pension. This may be for a former employee, an existing employee who’s in partial retirement or dependent of a deceased employee.

Continue to complete the employee details requested.

Image showing complete employee information screen.

You’ll be asked to enter a National Insurance category letter.

Once all of the relevant blank boxes are filled, click ‘next’ to continue. When you’ve finished entering the employee’s details, a summary screen will appear.

To view the details select from the headings in the middle of the screen.

Image showing Employee details summary screen.

To edit the details select the ‘Change employee details’ link from the bottom right of the screen.

Image showing Change employee details screen.

To add another employee select the employer name link from the ‘Navigation’ on the left of the screen. Select ‘Manage employees’ and repeat the process until all of the employees have been added.

Step 8: Start using BPT

You’ve now done the following:

• registered as an employer with HMRC

• enrolled to use HMRC’s Online Service

• downloaded and installed BPT onto your computer

• added your employer and employee details

You’re now ready to use BPT to operate PAYE on your employees pay. You must add employees pay details each time that you pay them. You then need to send that payroll information to HMRC on or before the day you pay your staff.

For help with this you can read (and may want to print) the guide Basic PAYE Tools.

You will not need to refer to this first time users guide again as this process is now complete.