As an employer, reimbursing or paying your employees’ bank charges counts as earnings.

You will need to:

  • add the payments to your employees’ other earnings
  • deduct and pay PAYE tax and Class 1 National Insurance through payroll

What’s exempt

If your employees’ bank charges are your fault (eg because you paid their wages late) and you pay or reimburse them, this doesn’t count as earnings.

You won’t need to report anything to HM Revenue and Customs (HMRC) or pay any tax or National Insurance.

Technical guidance

The following guides contain more detailed information: