Tax on cash earnings ― overview

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

STOP PRESS: The remittance basis is abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. The legislation is included in FA 2025. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

What income is subject to tax via PAYE?

Income tax is applied via PAYE to income which counts as ‘employment income’. This note sets out the basic definitions of what is employment income, who it applies to and when. It also sets out the rates of income tax.

Who does tax via PAYE apply to?

Tax via PAYE applies to employees and office holders in their earnings from that employment or office. Wherever the term ‘employee’ is used throughout the employment taxes module, this will include office holders unless specifically stated otherwise. The definition of an office holder is not simple, but broadly an office is ‘any position

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