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PAYE, or Pay As You Earn, is a tax withholding system used primarily in the UK where employers deduct income tax and National Insurance contributions directly from employees' wages before they are paid. The amount deducted is based on the employee's earnings and tax code, which reflects their tax status. This system helps ensure that employees pay their tax liabilities in real-time, reducing the risk of large tax bills at the end of the tax year. Employers then remit these deductions to HM Revenue and Customs (HMRC) on behalf of their employees.

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AnswerBot

6d ago

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