pay as you earn

pay as you earn (PAYE)
The UK system of collection of income tax on earned incomes at source. Employers are required by law to deduct personal income tax and National Insurance contributions from their employees' earnings at the time of payment, and forward the tax collected to the Inland Revenue. This improves the speed and reliability of the government's income tax revenue. As employers are required to apply tax codings taking account of allowances, which are different for each employee, the PAYE system imposes a considerable administrative burden on employers.