A UK payslip shows what you earned before deductions (gross pay), what was taken off (Income Tax, National Insurance, pension, student loan and anything else), and what reached your bank account (net pay). The two lines most worth checking are your tax code, which controls how much tax is deducted, and your National Insurance category letter, which controls how much NI you pay.
Every employee is legally entitled to a payslip on or before payday, printed or online. It must show your pay before and after deductions, any deductions that vary, and your hours if your pay depends on time worked. This guide goes through each line, shows a worked example and lists the mistakes worth looking for. To see what your salary should produce, run your numbers through the take-home pay calculator.
The main parts of a payslip
Layouts vary between payroll systems, but almost every payslip has the same building blocks: your details at the top, payments on one side, deductions on the other, and year-to-date totals at the bottom.
| Line | What it means | What to check |
|---|---|---|
| Employee and NI number | Identifies you to HMRC | NI number is yours and correct |
| Tax code | Tells payroll how much tax-free pay you get | Usually 1257L (S1257L in Scotland, C1257L in Wales) |
| NI category letter | Sets your NI rate | Most people are A |
| Tax period | Week or month number of the tax year | Month 1 is April, month 12 is March |
| Gross pay | Pay before any deductions | Matches salary, hours and overtime |
| Deductions | Tax, NI, pension, student loan, others | Each one looks right for your pay |
| Net pay | What is paid into your account | Matches your bank statement |
| Year to date | Running totals since 6 April | Totals rise steadily, no odd jumps |
Payments: gross pay and what goes into it
Gross pay is everything you earned in the pay period before deductions. If you are salaried, it is normally your annual salary divided by 12 (or 52 if paid weekly). Other lines may be added on top:
- Basic pay: salary or hours multiplied by your hourly rate. If you are paid by the hour, check the hours shown match what you worked. From April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over.
- Overtime, shift allowances and bonuses: usually shown as separate lines and taxed in the period they are paid, which is why a bonus month can look heavily taxed.
- Holiday pay: sometimes listed separately when you take leave, especially if you work irregular hours.
- Statutory payments: Statutory Sick Pay, Statutory Maternity Pay and similar payments go through payroll and are taxed like wages.
- Taxable benefits: some employers payroll benefits such as private medical cover. These appear as a notional amount that increases your taxable pay but not your cash.
Your tax code and Income Tax
Your tax code tells payroll how much of your pay is tax-free. The number is your tax-free allowance with the last digit removed, so 1257L means £12,570, the standard Personal Allowance for 2026/27. The letter describes your situation. Tax is then charged at 20% on taxable income up to £50,270, 40% up to £125,140 and 45% above that in England, Wales and Northern Ireland. Scotland has six bands, and Scottish taxpayers have codes starting with S.
- L: you get the standard Personal Allowance.
- M or N: you have received (M) or given away (N) Marriage Allowance.
- BR, D0, D1: everything from this job is taxed at 20%, 40% or 45%, usually used for a second job or pension.
- 0T: no tax-free allowance, often used when a new employer has no information about you.
- K: you have untaxed income or benefits worth more than your allowance, so extra tax is collected.
- W1, M1 or X: an emergency code. Tax is worked out on each payday in isolation rather than on the year so far, which can mean you pay too much until it is fixed.
National Insurance and your category letter
Employees pay Class 1 National Insurance of 8% on earnings between £12,570 and £50,270 a year (worked out per pay period, roughly £1,048 to £4,189 a month) and 2% above that. Unlike Income Tax, NI is calculated on each pay period separately, so it does not balance out over the year.
Your category letter is printed on the payslip. Most people are A. M is for employees under 21 and H for apprentices under 25, and in both cases you pay the same as category A, but your employer pays less. C means you are over State Pension age, so you pay no employee NI. If you have reached State Pension age and still see NI being deducted, tell your employer. See how National Insurance works for what your contributions buy.
Pension, student loan and other deductions
- Workplace pension: if you are auto-enrolled, the legal minimum is 8% of qualifying earnings (pay between £6,240 and £50,270 a year), with at least 3% from your employer. A net pay scheme takes your contribution before tax, so your taxable pay drops. A relief at source scheme takes it after tax and the provider claims 20% back from HMRC. Under salary sacrifice, your gross pay itself is reduced and you also save NI.
- Student loan: 9% of earnings above your plan threshold for 2026/27: Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000. Postgraduate loans take 6% above £21,000. Like NI, this is worked out per pay period. If a deduction appears for a loan you have repaid, or for the wrong plan, contact the Student Loans Company.
- Other deductions: union fees, cycle to work or season ticket loan repayments, give as you earn donations, and court-ordered deductions such as attachment of earnings. Fixed deductions must be explained on the payslip or in a separate written statement.
Worked example: £30,000 salary paid monthly
Here is a simplified April payslip for someone in England on £30,000 a year, tax code 1257L, NI letter A, on student loan Plan 2, with no pension deduction. Real payroll uses HMRC tables, so expect small rounding differences.
| Line | Amount | How it is worked out |
|---|---|---|
| Gross pay | £2,500.00 | £30,000 / 12 |
| Income Tax | £290.50 | 20% of (£2,500 minus £1,047.50 monthly allowance) |
| National Insurance | about £116 | 8% of pay above about £1,048 |
| Student loan (Plan 2) | about £4 | 9% of pay above £2,448 |
| Net pay | about £2,089 | Gross minus deductions |
Add a 5% pension contribution and net pay falls by less than 5% of salary, because you get tax relief on it. The take-home pay calculator and the student loan calculator let you try your own figures.
Common payslip mistakes and how to fix them
- Emergency tax code after starting a new job: give your new employer your P45, or complete HMRC's starter checklist. Overpaid tax is usually refunded through payroll once the code is corrected.
- Wrong tax code: check it in your HMRC personal tax account or the HMRC app. Codes can be wrong if HMRC has an outdated estimate of benefits, a second job or untaxed income.
- Missing hours or overtime: raise it with payroll quickly, with your rota or timesheet.
- Pay below minimum wage: divide your pay for the period by the hours worked, including required training and some travel time. If it is below the legal rate, raise it with your employer or contact Acas.
- Pension not going in: check the contribution arrives in your pension account. If it does not, contact the provider and then The Pensions Regulator.
- Student loan deducted when it should not be: contact the Student Loans Company. Overpayments can be refunded.
Using your payslip to manage money
Once your payslip makes sense, use it. Base your budget on net pay, not gross. Keep payslips and your annual P60 somewhere safe, as lenders, landlords and benefit claims often ask for them, and they are your evidence if you need to claim a tax refund. When your pay goes up, the pay rise calculator shows what actually reaches your account, and setting aside part of each increase before you get used to it is one of the easiest ways to save. SYM can help with that, by suggesting a small amount to put aside each day and tracking your streak.
For a deeper look at where each pound goes, read understanding your payslip: where does your money go, and for every code and letter, UK tax codes explained.
Frequently asked questions
What does 1257L mean on my payslip?
Why is my take-home pay different this month?
What is the difference between gross pay and net pay?
How do I know if I am on an emergency tax code?
Does my employer have to give me a payslip?
- payslip
- tax code
- National Insurance
- take-home pay
- student loan
- workplace pension