What is an Employer Reference Number? (ERN Number)

What is an ERN? 

Your employer reference number (ERN) is a unique set of numbers and letters that identifies your business and has a number of uses, including employment and tax matters, as well as buying business insurance.   

How do I find my Employer Reference Number (ERN)?

When you register as an employer with HMRC, you’ll receive this reference number in your welcome pack. It’s also often referred to as an employer Pay As You Earn (PAYE) reference number on tax forms and you need it for end of year HMRC PAYE returns.

There are a few places you can find your ERN:

• In the yellow booklet supplied by HMRC when you first registered as an employer.
• On any historic payslip, P45, P60 or P11D issued to past or present employees.
• Other correspondence from HMRC about PAYE.

What is the employer reference number used for?

You’ll mainly use your ERN as a tax reference number, for tax returns at the end of the year. Without this, your PAYE return would be rejected. The reference could also be used for:

• Employees’ tax credits
• Employees’ payslips
• Employers’ liability insurance

You’ll also need your ERN when buying employers’ liability insurance, which is a legal requirement for anyone who employs at least one member of staff. Without a registered ERN, your employers’ liability insurance could be canceled.

If you ever have to claim on your business insurance, your ERN will be used by the Employers’ Liability Tracing Office (ELTO) to start the claim process.

It’s also worth knowing that employee claims can even be made many years after they’ve worked for your company. For example, claims for illness caused by exposure to asbestos while at work had to be made retrospectively, when the symptoms and illness had been linked to working with the substance. 

The ERN is logged so it can be used in the future to trace the claim to the original employer and their insurance policy at the time.

What does an employer reference number look like?

Your ERN is split into two parts:

• A number that identifies your business to HM Revenue and Customs (HMRC)
• A three-digit tax reference number and a set of digits that identify your business to HMRC.

It will look like something this - 123/AB12345.

Do you need an ERN number if you’re self-employed?

Any business that employs staff must have an ERN, and there are a number of occasions when you’ll need to have it to hand, including:

• Completing your end-of-year PAYE return -  A missing or incorrect ERN is one of the most common reasons end-of-year returns are rejected, so you’ll need the correct ERN to meet your statutory reporting obligations.
• Employee requests - Employees usually need their employer’s PAYS reference number when applying for benefits, such as Universal Credit and tax credits, or student loans. 
• When buying employers’ liability insurance - You’ll need your ERN when buying employers’ liability insurance. This is so the firms an employee has worked at can be identified, if there’s a claim a long time after the event.

The only instances when you won’t need an ERN are:

• If your business doesn’t have any employees
• If all your employees are paid a salary below the PAYE tax threshold (£11,500 a year)
• If your business is registered outside England, Wales, Scotland or Northern Ireland (in Jersey or Guernsey for example).

If you’re unsure about whether you need an ERN or not, contact HMRC.

Can you have more than one ERN?

If your business operates with separate PAYE schemes for multiple locations, HMRC may have issued you more than one employee reference number. Again, if this or anything else is causing you confusion, contact HMRC for help.

Does your business need employers’ liability insurance?

If your business employs even one member of staff, then you’re legally obliged need to have at least £5 million worth of employers’ liability insurance in place. If not, you could be fined up to £2,500 for each day you don’t have adequate cover in place.

There are exceptions to this law, to find out more check out our employers’ liability insurance page.

The simplest way to make sure you have enough employers’ liability insurance to cover your business is to speak to the team at Bionic - we talk your language and won't waste your time, working with you to just find the right policies you need, with no unnecessary extras.

Protect your business now, start a quote with us online today. We’ll compare quotes from the UK’s most trusted insurers and adapt your insurance to suit the needs of your business.

What is Pay As You Earn (PAYE)?

An employer’s PAYE is a way for HMRC to collect Income Tax and National Insurance Contributions (NICs). These are deducted from employee wages or a pension as tax. A dedicated tax code tells an employer how much to deduct.

How do I get my employer's PAYE reference without P60?

If you lose your PAYE reference number and don’t have access to your P60, you'll be able to find your reference number in any PAYE letters or emails sent to you from HMRC. Most general correspondence from HMRC will include your PAYE number anyway.

Is the employer PAYE reference the same as the tax office reference number?

Yes. A tax office reference number and an employer PAYE reference number are the same thing. These reference numbers are a combination of letters and numbers used by HMRC to identify your payroll details and match them to your business.

What does ERN exempt mean?

If you use PAYE then an ERN is allocated to an employer and applies to applies to all UK businesses employing one or more employees. In those circumstances where companies do not use a PAYE scheme, they have no ERN and are therefore ‘ERN exempt’. 

 This normally is the case if there is no PAYE scheme in place and the following is true: 

• If all employees are paid below the National Insurance Lower Earnings Limit - less than £123 per week AND the employees do not have another job, receive any company benefits and don’t have a pension. 
• If all employees are labour only sub-contractors, or self-employed, and therefore no payments are made via PAYE. 
• If they are registered in the Isle of Man, or the Channel Islands (these have no tax presence in the UK). 

 Is there an ERN exempt threshold?

There are some circumstances in which you might be exempt from having an ERN – this is normally if you do not use the PAYE system for employees and they earn less than the Lower Earning Limit. For example, if you have a young worker doing work experience with you for free – here is a full list of exemptions: 

• If your employees earn less than the Lower Earning Limit – currently £123 a week 
• If your employees work as unpaid volunteers 
• If you have employees through an agency or as self-employed sub-contractors 
• If your business is based or registered outside England, Northern Ireland, or other areas without a UK tax presence, like the Channel Islands or the Isle of Man. 
• If you don’t have any employees. 

What happens if I've lost my ERN number?

It’s really important to keep your ERN number safe because you will need it throughout the tax year. If you lose it, don’t worry too much. You will be able to find it on letters or emails about PAYE from HMRC. It will also appear on any P45s or P60s you have.

Remember, if you have even one member of staff, in most circumstances you are required by law to have employer’s liability insurance in place. To make sure your business is properly protected, compare business insurance and start a quote online today and our knowledgeable team will help support you with finding the right cover.