The Full Payment Submission (FPS) via RTI should be submitted to HMRC on or before the payroll payment date. This will be the day that the employees are contractually entitled to their pay, but not necessarily the same day on which they receive their wage or salary.
Some employees won’t have a contractual payment date, in which case the “regular date for payment” should be declared on the FPS. There is detailed guidance on this in leaflet CWG2: “2018-2019: Employer further guide to PAYE and National Insurance contributions”– see section 1.8.
There is much confusion about what day employers should treat as the “payment date” for RTI purposes, as different and incomplete advice has been published by HMRC in the August 2018 and October 2018 Employer Bulletins. Even the advice in the December 2018 Employer Bulletin was incomplete as it doesn’t mention the easement for non-banking days such when the regular payment date falls on a weekend or bank holiday.
When the actual payment date is brought forward to a day earlier than the first banking day before the normal payment date, the advice from HMRC has been to report the actual payment date on the FPS. For example, if the normal payment date is 28th of each month, but in December the employer pays their employees on Friday 21 December, the advice was to show the payment date on the FPS as 21 December.
However, this advice changed with an announcement from HMRC sent by email to employers on 17 December, which included this example.
If you pay on 21 December but your normal payment date is 31 December, please report the payment date as 31 December. In this example the FPS would need to be sent on or before the 31 December.
HMRC explained that this change in approach: “will protect your employees’ eligibility for Universal Credit, because an early payment could affect further entitlements.”
In other words they don’t want Universal Credit claimants being treated as if they received double pay in their December claims period, and no pay in their January claims period.