Demystifying Your Payslip: What All Those Numbers Really Mean
Have you ever looked at your payslip and felt confused by all the numbers and codes? You’re not alone. With so much information packed into one document, it can be tough to figure out how much money you’ll actually receive.
Why Do We Get Payslips? A payslip is a document your employer provides, showing your pay, deductions, and tax information. Every employer is required to give you a payslip, and it’s a good habit to check them regularly and keep them for six years. If your payslip is digital, be sure to save or print a copy for your records.
Key Information on Your Payslip
Employer Information Typically located in the top left corner, this includes your employer’s name, logo, and address.
Personal Information Usually found in the middle or right-hand side, you’ll see your name and sometimes your address here.
Payroll or Employee Number This number helps your employer identify you for payroll purposes and is usually displayed alongside your personal details.
Payment Date The date your salary will hit your bank account. This could be monthly, weekly, or on a specific date.
Tax Period Since the tax year starts in April, this section shows the period in which you’re being taxed. For example, if you’re paid monthly, April would be period 01, and March would be period 12.
Tax Code Your tax code is issued by HM Revenue and Customs (HMRC) to determine how much Income Tax should be deducted from your pay. It consists of numbers and a letter, indicating how much of your income is tax-free. Make sure you’re not on an emergency tax code, as that could lead to overpayment of taxes.
National Insurance Number This is your unique number, assigned at age 16, used to track your contributions toward benefits and pensions. You’ll need it to work in the UK.
Payments and Other Earnings Your payslip will show your Gross Pay, which is your total earnings before any deductions. It may also detail how this pay was calculated, including hourly rates or the number of hours worked. Bonuses, commissions, and allowances will also be listed here.
Additional Payments:
Maternity, Paternity, and Adoption Pay – Recorded separately if applicable.
Expenses – Any work-related expenses reimbursed by your employer will appear here.
Pension Contributions If you’re part of your employer’s pension scheme, your contributions (and sometimes your employer’s) will be shown here.
Deductions These are amounts taken from your Gross Pay, such as:
Income Tax – Pays for public services like healthcare and education.
National Insurance – Contributes toward benefits and the NHS.
Pensions – Your contribution to a pension fund.
Childcare – For childcare vouchers, if applicable.
Student Loan Repayments – If your income exceeds the threshold.
Court Orders and Child Maintenance – Court-ordered deductions for debts or child support.
Other Deductions – Could include repayments for loans, charitable donations, or cycle-to-work schemes.
Net Pay This is the final amount you’ll receive after all deductions.
Taxable Pay This section shows how much of your earnings have been taxed to date in the current tax year.
Regularly checking your payslip ensures that you’re being paid correctly and taxed appropriately. If you find any discrepancies, such as overpaying tax, it’s a good idea to contact HMRC. For further advice, visit our website.