Methods of calculating tax
Emergency basis
Note
The information on this page refers to current employer obligations. For employer obligations before 1 January 2019, please see the Employers Guide to PAYE.
Employers must operate Emergency Tax when no Revenue Payroll Notification (RPN) is available.
An employer will not receive an RPN if:
Applying Emergency Tax
Different rules for Emergency Tax apply depending on whether the employee has given their PPSN to their employer.
Where the employee provides a PPSN
An employee gives the employer their PPSN, but no RPN is available to download. The employer must give the employee a tax cut-off point for their first four weeks of employment. This is based on the single person tax cut-off point for the year.
The employer taxes the employee’s income at the standard rate until week 4. From week 5 onwards income is taxed at the higher rate.
The Emergency Tax rates, rates bands and tax credits are available in Emergency Basis of Tax Deduction.
Where the employee does not provide their PPSN
The employer must tax an employee at the higher rate of tax with no tax credits. If the employee provides their PPSN after this, the employer must apply for a RPN. The employer should then operate tax based on the details returned on the RPN.
If no RPN is available at this point, the employer must apply normal Emergency Tax rules.
Emergency Tax is continuous
An employer might have an employee that works for them for separate periods over the year. If this employee is on Emergency Tax, the employer counts every week starting from the date they began working for them. This applies even if the employee does not work each week.
- Example
An employee first started working for you five weeks ago. They are on Emergency Tax. They have actually worked for only three of those five weeks.
In week 5, you tax all their pay at the higher rate with no tax credits from week 5 onwards.
Next: Tax exemption and marginal relief