an abbreviation for pay as you earn, a system of income taxcollection introduced in 1944 in Britain, in which the taxes owed by an employee are taken out of his weekly earnings before he is paid. By having the tax withheld by the employer, the taxpayer cannot spend the money owed to the government on other items. The majority of taxpayers pay most of their incometaxes in this manner. The employer is responsible to the income tax authorities for ensuring the proper tax is deducted, collected and paid to the government.