A payslip is one of the most important documents you receive, yet many people only look at the final figure. Checking it every month takes a few minutes and can catch errors early. Employees and workers in the UK have a legal right to an itemised payslip, whether on paper or online.
What a payslip must show
At a minimum, your payslip should show your gross pay before deductions, any deductions that change from payment to payment, the net pay you actually receive and, where relevant, the hours worked. If deductions are fixed, they can sometimes be shown as a single total, but you can ask for a breakdown.
Gross and net pay
Gross pay is what you earn before anything comes off. Net pay, often called take-home pay, is what is paid into your bank account after tax and other deductions. When you compare job offers, compare gross salary but also check what you are likely to take home.
Income tax and your tax code
Income tax is usually deducted under Pay As You Earn (PAYE). Your tax code tells your employer how much tax-free pay to give you. A common code, ending in the letter L, usually means you receive the standard personal allowance. Codes can change if you have multiple jobs, benefits in kind or an underpayment from a previous year. If your tax code looks wrong, check it on your personal tax account and contact HMRC.
National Insurance
National Insurance contributions build up your entitlement to certain benefits and the State Pension. Your payslip will show a National Insurance category letter and the amount deducted. Check that your category is correct for your circumstances.
Pension contributions
Most employers must automatically enrol eligible workers into a workplace pension. Your payslip may show your contribution and sometimes the employer's. Check whether the contribution is taken before or after tax, because that affects how tax relief is applied. If you are not sure, ask your pension provider or payroll.
Student loan and postgraduate loan
If you have a student loan, repayments are taken through payroll once your earnings pass the threshold for your repayment plan. The payslip should show the deduction. If you have repaid in full or believe the plan type is wrong, contact the Student Loans Company.
Other deductions and additions
You may see deductions for things like a cycle-to-work scheme, season ticket loan or union fees, and additions such as overtime, commission, bonus or expenses. An employer can only make deductions that are required by law, authorised by your contract or that you have agreed to in writing in advance.
Common errors to look for
- A tax code that does not match your situation.
- Missing overtime or holiday pay.
- Pension contributions that stop or start unexpectedly.
- Deductions you do not recognise.
- Hours or pay rate different from your contract.
What to do if something looks wrong
Raise it with payroll or your manager first, in writing, and keep a copy. If you do not get a satisfactory response, speak to Acas. Unlawful deductions from wages can be challenged, with a strict time limit for claims.
Keep your payslips
Keep payslips for at least the current and previous tax years. They are useful as proof of income for mortgages, tenancy applications and benefit claims, and as evidence if there is a dispute.
Sources
General information, not tax advice.
We write for jobseekers, check important claims and link to official sources where rules may change.