Employer PAYE Reference Number (ERN): what it means for contractors

When you first register your company with HMRC as an employer, you’ll receive confirmation of your new PAYE scheme and several reference numbers. One to look out for, and keep safe, is your Employer Reference Number (ERN).

You don’t have to request the number, as it’ll be issued automatically once the registration is complete.

It usually appears immediately in your HMRC online account, although the official confirmation letter may arrive a few days later.

You can also view it in your HMRC Business Tax Account under PAYE for employers (see PAYE Online for employers).

Unique to your business, the ERN consists of a tax reference number made up of two parts, for example, 123/AB456.

You may also see it referred to on tax forms (such as your P11D, P60 or payslips) as your PAYE reference.

In this guide, Vincent May, SG Umbrella’s Payroll Manager, walks through everything contractors need to know about their ERN – from registration to what to do if you lose it.

When should you register?

Make sure you register your company as an employer before the first payday.

Although HMRC issues the ERN almost instantly online, it can take a few weeks for the confirmation letter to arrive, so don’t leave it to the last minute.

Most limited company contractors hire an accountancy firm from the outset, and your accountant will normally handle PAYE registration along with Corporation Tax and VAT setup.

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You can register up to two months before the first payday, but no sooner than that.

If you pay an employee before receiving the ERN, you can still run the payroll, provided you keep a copy of the payment details and submit a late Full Payment Submission (FPS) to HMRC once the number arrives.

See official guidance: Register as an employer.

HMRC will also issue your business with an Accounts Office Reference Number (AORN) alongside the PAYE Reference Number. The Accounts Office Reference Number is used by HMRC for payment allocations and must be used when making payments for PAYE to ensure it credits against the correct account. You may also notice an additional 4 digits at the end of this reference on some payment requests from HMRC. These will often align to the tax year and period to ensure the payment allocates to the correct period (for example, 2612 at the end refers to tax year ending 26, and period 12 of 12). Different digits may be used to allocate payments to fines or incurred interest.

The AORN is also needed when submitting RTI’s via the payroll and is frequently used by HMRC during the security screening process to identify a company when they are contacted by your business or agent, so it’s important to keep a record of this as well.

Director of a limited company

It’s important to note that you must register your company as an employer with HMRC even if you are the sole director of a limited company and also the sole employee.

More than one PAYE scheme?

Each ERN identifies a single PAYE scheme, but if your company operates multiple PAYE schemes across different locations, you may be issued with an ERN for each one.

It’s your responsibility to keep track of these and make sure you use the correct reference in any official correspondence.

When do you need an ERN?

As mentioned previously, you’ll need to quote your ERN in all correspondence with HMRC, above all when you submit your RTI payroll returns, P11Ds, or end-of-year filings.

If you enter an invalid number or miss out your ERN altogether, you may not be able to complete your PAYE submissions correctly.

Employees can also ask you for an ERN for various reasons, for instance, if they are applying for a student loan, or for tax credits or Universal Credit while in your employment. You should include the ERN on employees’ payslips.

What if you lose your ERN?

You are likely to need your ERN at various points during the tax year. If you lose the number, you should be able to find it by checking previous correspondence from HMRC, your company’s PAYE online account, or within your payroll software records. The number will also appear on your employees’ P60 and P45 forms.

No record of an ERN?

If you’re sure you don’t have a record of your ERN but are presently employing staff, you may not have registered with HMRC as an employer.

If that’s the case, make sure you register as soon as possible, or you could face penalties for non-compliance.

Some exceptions to PAYE

For the sake of completeness, and although these situations rarely apply to contractors, you don’t have to register as an employer with HMRC and therefore won’t require an ERN in the following cases:

• If employees earn less than £129 per week (the 2026/27 Lower Earnings Limit).
• If employees are unpaid volunteers.
• If your company is based in the Isle of Man or the Channel Islands.
• If you reimburse genuine business expenses only, without paying a salary.

For more related reading, try our complete PAYE payroll guide for contractors.