What Is a TUPE Payroll?
A TUPE transfer happens when employees move to a new employer due to a business sale, merger, or restructure. TUPE stands for Transfer of Undertakings (Protection of Employment).
When this happens:
Employees move from one PAYE scheme to another.
They keep the same pay, benefits, working conditions, and length of service.
A P45 is not issued to the employees — instead, we provide you with a copy and existing tax codes and year-to-dates (YTD) data are carried over.
The start date in payroll reflects the TUPE transfer date, but the employee’s original service date remains for benefits like holiday or redundancy.
During onboarding you will be required to provide both the start date and continuous service date
TUPE Payroll Setup – Key Questions
Before we can run payroll under TUPE, we’ll need to confirm and ask yourself the following questions.
PAYE Scheme (HMRC Information)
Are we using an existing PAYE scheme or creating a new one?
If new, has it been applied for and activated with HMRC?
Do you have the Government Gateway login details (User ID & password)?
Transfer Details
What is the official TUPE transfer date?
Full-month transfers are highly recommended for a smoother process
Have the employees been marked as leavers on the old payroll?
If yes, what leave date was used?
If not, when will this happen?
Are any employees staying on the old PAYE scheme?
If not, and the company is ceasing trading, please:
Refer to our Company Ceasing Trading Guide
Let your CCR contact know if other scheme is with PayFit.
Pension Details
As part of the TUPE process, it's important that your pension provider is also in the loop, and that we’re aware of any potential changes.
Please confirm:
Has your pension provider been notified about the TUPE transfer?
Will employees remain in the same pension scheme, or will they be moved to a new provider under the new PAYE?
Will there be any changes to your employee contribution method or does everything remain the same?
Benefits
If you’ve been providing employee benefits under the previous PAYE scheme, it’s important to check how these should be reported before the scheme is closed.
Please:
Contact HMRC to confirm how they want the benefits reported
Clarify whether benefits should be reported under:
The old PAYE scheme
The new PAYE scheme
Or both, depending on timing
Ideal Payroll Process
The smoothest way to handle a TUPE transfer is:
Make employees leavers on the original PAYE scheme at the end of the month.
In the onboarding month, from the 1st, add them as new starters under the new PAYE scheme.
This lets HMRC receive two separate submissions:
One showing the employee has left the old PAYE
One showing they’ve been set up under the new one
This ensures records are clear and tax data is processed correctly.
Communicating TUPE to Employees
It’s important to keep employees informed throughout the TUPE process to reduce confusion and ensure a smooth transition.
Here’s what they need to know:
What Employees Can Expect:
They will be transferred to a new employer with no break in service.
Their pay, benefits, holiday entitlement, and working conditions remain the same.
They will not receive a P45, but all tax details (such as their tax code and year-to-date earnings) will be carried across to the new employer’s payroll.
In payroll records, they will have a new start date (the TUPE transfer date), but their original length of service stays intact for any time-based benefits like redundancy or leave entitlement.
Tips for Communicating to Employees:
✅ Be transparent and reassuring — the purpose of TUPE is to protect their existing terms.
✅ Let them know who to contact with payroll or HR questions during the transition.
✅ Provide clarity on when they can expect any changes to appear on their payslip (e.g. new employer name).
✅ Reinforce that no action is required from their side unless you specifically request additional information.
Example of E-mail Communication to Employees
Dear Team,
As part of recent business changes, we’d like to inform you that you'll be transferring to a new employer under the TUPE (Transfer of Undertakings – Protection of Employment) regulations. This change will take effect from [DATE].
What This Means for You:
There will be no changes to your pay, benefits, or working conditions.
You will retain your original start date, which ensures your continuous service is preserved (e.g. for holiday entitlement and redundancy calculations).
A P45 will be generated for your new employer only. You will not receive a copy of this, but your payroll and tax details (including your tax code and year-to-date pay) will be securely transferred.
Your payslip will reflect your new employer's name starting from [DATE]
What You Need to Do:
You don’t need to take any action at this time. If we require anything from you during the transition, we will contact you directly.
Employee Space and Access information:
Previous Employee Account
During the transition, your current employee account will appear as deactivated. As seen on the screenshots below.
Please do not submit any leaves or expenses during this period. However, you will still have read-only access to your existing documents and payslips.
New Employee Account
Closer to the transfer date, you’ll receive a welcome email from PayFit on behalf of your new employer. This will grant you access to your new employee space.
You’ll log in using the same email address and password as your previous account.
Once logged in, you’ll see two employee spaces:
Your previous employee account, [ENTER ENTITY NAME] which will remain deactivated but retain your historical documents and payslips.
Your new employee account, [ENTER ENTITY NAME] which won’t show payslips until your first payday in August, but will be available for submitting leaves and expenses immediately.
We’re working closely with the new payroll team to ensure a smooth and seamless handover. If you have any questions or concerns, please feel free to reach out.
Thank you for your understanding throughout this transition.
Best,
TUPE Checklists
Here are some downloadable checklists to help you ensure all necessary actions are completed before transferring employees under TUPE.