What is a PAYE reference number and why is it essential for UK businesses?

The PAYE reference number is a unique code assigned by HMRC to identify your business as an employer for tax and National Insurance purposes.

What exactly is an employer PAYE reference number?

An employer PAYE reference number is a unique alphanumeric identifier that HMRC uses to track the tax records of a business employing staff.

Why is the PAYE reference number sometimes referred to as an Employer Reference Number (ERN)?

Technically, HMRC refers to it as an Employer PAYE reference in official correspondence, and PAYE reference number in their online guidance and general web content. That said, an insurance or payroll software provider will typically call it an Employer Reference Number (ERN). Despite the different names, they are the exact same identifier.

What form does the PAYE reference number take?

The PAYE reference number consists of three digits, a forward slash, and then a combination of alphanumeric characters. The first three digits represent the specific tax office that deals with your PAYE scheme, while the second part is the unique reference for your business.

For example, a typical format might look like: 123/AB456.

What is the purpose of the PAYE reference number?

As a business, you will use this special combination of letters and numbers to facilitate the accurate transfer of information regarding income tax and National Insurance contributions to HMRC, for example, via the Real Time Information (RTI) system.

Think of it as a digital label that ensures every penny you withhold from wages is correctly attributed to your company account. It is particularly important to note that this is a unique code for the company, not the individual employee. Each group of employees within a single PAYE scheme falls under this one identifier.

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Where can I find my PAYE reference number?

You can find your employer PAYE reference number on almost any official correspondence sent to you by HMRC regarding your payroll.

The most common place to locate it is in the welcome pack you received when you first registered as an employer. If you have misplaced that physical form or letter, you need not worry. You can also find it:

• On P45 and P60 forms issued to past and present staff

• On P11D forms used for reporting expenses and benefits

• In your online HMRC business tax account.

• On payslips provided to your workforce.

If you use a fractional CFO (a part-time finance professional who provides Chief Financial Officer services) or an external finance team, they will also have this record on file within your financial documents. In any case, it is vital to keep this identifier safe, as you will need to provide it frequently.

When do I need to use this reference number?

You will need to use your PAYE reference number whenever you interact with HMRC regarding your staff or their pay.

It serves as the digital fingerprint for your business within the UK tax system. Beyond standard payroll reporting throughout the tax year, there are also specific scenarios where use of the PAYE reference number is mandatory for every employer:

1. Setting up your payroll software

When you adopt a new payroll solution, the first thing the system requires is your PAYE reference number, or ERN. This ensures that Real Time Information (RTI) reports submitted to HMRC are linked to the correct employer record. Without it, your payment data cannot be processed, and you may face penalties.

2. Buying employers’ liability insurance

In the UK, you are legally required to have employers’ liability insurance coverage just as soon as you begin to hire staff. Your insurer will need your PAYE reference number, or ERN, to upload your policy details to the Employers’ Liability Tracing Office (ELTO). This body helps any employee find their insurer if they need to make a claim for an injury or illness related to their job, even many years down the line.

3. Issuing tax forms to employees

At the end of the tax year, you must issue a P60 form to every employee. This document summarises their total pay and deductions, and the P60 form must clearly display the employer PAYE reference in order to be valid.

4. Communicating with HMRC

Whether you are sending letters about a discrepancy or calling for help, HMRC agents will ask for this reference immediately to access all the details in your file.

How does the PAYE reference differ from the Accounts Office reference?

The PAYE reference number identifies who is paying, while the Accounts Office reference identifies the payment itself.

Why is accuracy critical for your CFO and management?

This distinction between the PAYE reference and Accounts Office reference is a common source of payment allocation errors for finance managers and directors. The Accounts Office reference is strictly for making payments to HMRC. It is 13 characters long, and ensures your money ends up in the correct pot.

If you use your PAYE reference number to pay your monthly bill, the payment might hang in suspense, leading to automated dunning letters for arrears you technically do not owe. So, experienced CFOs should know that confusing these two numbers is a common cause of administrative headaches.

Summary of HMRC employer identifiers

Use this quick reference guide to distinguish between the various codes issued by HMRC:

How do I register for a PAYE reference number?

You register for a PAYE reference number by setting yourself up as an employer on the official government website.

You must do this before the first pay day for your employees. However, you cannot register more than two months before you start paying people. It is a balancing act that requires good time management. Here are the steps involved:

1. Check eligibility: Ensure you actually need to register. If you pay anyone more than £123 a week in 2025/2026, or £129 a week in 2026/2027, provide benefits, or if they have another job, you must register.

2. Apply online: Use the government portal. You will receive your reference number within five working days.

3. Activate services: Once you have your number, you can activate PAYE for employers in your online account.

Tip: If you are a managing director of a limited company and you are the only employee, you will still need to register if you pay yourself a salary above the Lower Earnings Limit.

What changes should I expect for 2026 and beyond?

The fundamental structure of the PAYE reference number remains stable, but the reporting requirements attached to it are evolving.

As we move through 2026, HMRC is pushing for more digital integration. The move towards the mandatory payrolling of benefits is accelerating, with full implementation expected by April 2027.

This means your reporting of benefits in kind will flow directly through your payroll software using your PAYE reference, rather than requiring a separate annual submission.

Raising capital or planning for an exit? Investors will audit your compliance thoroughly. Having a clean history of submissions tied to your PAYE reference, or ERN, is a sign of a healthy financial operation.

Why modern businesses rely on automated software

Managing business reference numbers manually is a recipe for administrative chaos and compliance errors.

Using services like automated payroll software removes manual data entry risks. Such a robust platform stores your PAYE reference number and Accounts Office reference securely. And the software automatically applies the correct reference to every submission and payment file.

For a growing business, this automation is not merely about saving time. It also comes down to risk mitigation. CFO and HR leaders can rest easy knowing that every contribution report sent to HMRC carries the right identifiers, thus warding off costly investigations.

Also, such software allows employees to self-serve. They can download their own P60s and payslips, which already contain the necessary employer references, saving your office manager hours of administrative work. Even if you rely on fractional support staff, they can access all the data they need without delay.

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