Your payslip contains important information about your earnings and deductions. Understanding each line helps you check you're being paid correctly and make better financial decisions.
What Must a Payslip Include?
By law, UK employers must provide a payslip on or before the day you're paid. It must show:
- Your gross pay (before deductions)
- Your net pay (take-home pay)
- Any fixed deductions (like pension contributions)
- Any variable deductions (like income tax)
- The number of hours worked, if your pay varies by hours
Key Payslip Terms Explained
Gross Pay
Your total earnings before any deductions. This includes your basic salary plus any overtime, bonuses, or commission.
PAYE (Pay As You Earn)
Income tax deducted at source by your employer. The amount is calculated based on your tax code, which tells your employer how much of your income is tax-free.
National Insurance (NI)
Employee NI contributions, calculated on earnings above £12,570. In 2025/26 this is 8% up to £50,270 and 2% above that.
Tax Code
A code (e.g., 1257L) that tells your employer how much of your income is tax-free. 1257L means a personal allowance of £12,570. If your code is wrong, you could be over- or underpaying tax.
Net Pay
The amount actually paid into your bank account after all deductions. Also called take-home pay.
Pension
Your workplace pension contribution. For salary sacrifice pensions, this is deducted before tax is calculated, reducing your tax and NI liability.
Check Your Tax Code
The most common tax code is 1257L, which gives you the standard personal allowance of £12,570. But your code can vary if you have other income, unpaid tax from previous years, or certain benefits in kind.
If your tax code looks wrong, contact HMRC directly or check your Personal Tax Account at gov.uk. An incorrect tax code could mean you're paying too much (or too little) tax.