How to Read Your Payslip
By C.G. Handley
Your payslip explains exactly how your wages were calculated. Many people only glance at the final figure, but a few minutes spent reading it can help you spot mistakes early. Layouts differ between employers, though most include the same elements.
Basic details
At the top you will usually find your name, employee number, the pay date and the pay period it covers. Check that the dates are correct and that the pay period matches the hours or days you worked.
Gross pay
This is the total you earned before any deductions. It may include basic pay, overtime, bonuses, commission, holiday pay and statutory payments such as sick pay. If something is missing, such as overtime you worked, it is worth raising it with payroll.
Deductions
- Income tax (PAYE). Calculated using your tax code. See our guide to tax codes.
- National Insurance. Shown with a category letter, usually A for most employees.
- Pension. Your contribution to a workplace scheme, which may be taken before or after tax depending on how your scheme works.
- Student loan. Taken if you earn above the repayment threshold for your plan.
- Other deductions. Union fees, charitable giving, savings schemes or salary sacrifice arrangements.
Net pay
Net pay is gross pay minus deductions. This is the figure that should match the payment in your bank account. If the payment is different, ask payroll to explain the gap.
Year-to-date figures
Many payslips show running totals for the tax year, which runs from 6 April to 5 April: pay, tax and National Insurance so far. These help you see whether you are on track and are useful if you leave a job or complete a tax return.
Employer contributions
You may also see amounts paid by your employer, such as their pension contribution. These are not deducted from your pay, but they are part of your overall package.
What to check each month
- Is the pay date and period right?
- Do hours and rates match what you expected?
- Is your tax code the same as last month, and does it look right?
- Have any new deductions appeared?
- Does net pay match what arrived in your account?
Your employer has to provide a payslip, and it should show your pay and any deductions. Keep your payslips for at least a few years, as they can be useful for mortgage applications, tax queries and proof of income. If something looks wrong, speak to payroll first, and ACAS or Citizens Advice if it is not resolved.
This article is for general information only and is not financial or legal advice. For personal guidance, speak to a qualified adviser or an organisation such as MoneyHelper, Citizens Advice or ACAS.