My name is Steve Chen, a fellow member of ACCA and course director at APC (, teaching ACCA online courses to students from all around the world. This article will explain the concept of PAYE system in your ACCA Financial Accounting and Tax Papers.

Pay As You Earn (PAYE) System

This system means the employer withholds income tax and national insurance contributions from employees and pays them directly to the HMRC.

This system was originally developed by Sir Paul Chambers in the UK in 1944 and is now widely used in other countries such as New Zealand, South Africa, USA, Australia and other countries.

PAYE system is also called Pay As You Go (PAYG) withholding system in some countries. However, in Hong Kong (SAR), there is no PAYE system.

This means the employer does not need to withhold income tax from the employee on behalf of the government. The taxpayer needs to complete the tax return and submit it to the Hong Kong (SAR) tax authority (Inland Revenue Department) each year.

In addition to providing ACCA lectures online, I also wrote articles in ACCA AB magazine. Besides, I am the author of four accounting books. If you are interested in studying ACCA courses with me, please visit my website for further information, where you can find many of my ACCA demo video lectures.

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