Introduced in 1944, PAYE is now the way that most employees pay income tax.
Pay As You Earn – refers to income tax which is deducted from your salary before you receive it.
The money is sent to HMRC by your employer directly from your pay before it reaches your bank account.
National Insurance and student loan repayments may also be deducted in this way.
The alternative way to pay income tax is self-assessment, whereby individuals complete a self-assessment tax return and pay tax once or twice a year.