Guide

Understanding your payslip

A UK payslip is a dense little document that most people glance at once and then file. It is also the only place several expensive errors ever show up. This guide decodes every line, explains which figures actually matter, and lists the mistakes worth checking for each month.

The header block

The top of the payslip identifies the payment rather than the money. Expect a payroll or employee number, the pay date, the pay period, and a tax period number. The tax period is the one people miss: tax month 1 runs from 6 April to 5 May, so a payslip dated late April is period 1, and a March payslip is period 12. Cumulative PAYE uses that number to decide how much of your allowance has been released so far.

You will also find your tax code and your National Insurance category letter here. Both are worth a five-second glance every month. A code that changes without warning is usually HMRC reacting to something - a benefit in kind, an estimate of untaxed income, or an underpayment being collected.

Payments

Basic pay. Your salary divided by the number of pay periods, or hours multiplied by rate.
Overtime, shift premium, commission, bonus. Shown separately so you can check them against what you worked or earned.
Statutory payments. Statutory sick pay, maternity, paternity or adoption pay appear as their own lines and are taxable.
Expenses and reimbursements. These should not be taxed. If a mileage claim is sitting inside your taxable gross, something has gone wrong.
Gross pay. The total of everything above.

Gross pay vs taxable gross

Many payslips show both, and the difference tells you how your pension is administered. Under a net pay arrangement or salary sacrifice, the pension contribution is removed before tax, so taxable gross is lower than gross. Under relief at source the contribution comes out of net pay, so the two figures match. Knowing which one you are on decides whether you have higher-rate relief to claim - see pension tax relief: the three methods.

Deductions

PAYE income tax

Calculated cumulatively from your taxable gross, your tax code and the tax period number. On a standard 1257L code with steady pay, this should be almost identical every month. A sudden jump means your pay changed, your code changed, or you have moved into a higher band.

National Insurance

8% of monthly earnings between £1,048 and £4,189, then 2% above, on category A. Unlike tax, it is not cumulative, so it varies genuinely with each month's pay rather than smoothing out. More detail in National Insurance explained.

Pension

Your contribution, and often the employer contribution as a separate information line. Under salary sacrifice, the whole amount may show as an employer contribution with your gross pay reduced instead.

Student loan and postgraduate loan

Two separate lines if you have both. Each is a whole-pound figure because HMRC rounds deductions down. Check the plan is right - see student loan plans compared.

Other deductions

Season ticket loans, cycle-to-work payments, union subscriptions, share scheme purchases, charitable giving through payroll and attachment of earnings orders all appear here. Each should be something you agreed to.

Year-to-date figures

Usually tucked into a corner, these running totals are the most useful part of the document. They show taxable pay, tax paid, National Insurance, pension and student loan for the tax year so far. Because PAYE is cumulative, a single month can look odd while the year to date is perfectly correct - and the reverse is also true, which is why a year-to-date check catches problems a monthly glance misses.

A quick sanity test: divide your year-to-date taxable pay by the tax period number to get an average monthly figure, multiply by twelve, and run that through the take-home pay calculator. The annual tax it produces should be roughly twelve times your average monthly deduction.

Errors worth checking for

An emergency code left in place after a job change. Look for W1, M1 or X after the code.
A BR or D0 code on your main job because HMRC thinks it is your second one.
A student loan deduction on the wrong plan, or a postgraduate deduction missing entirely.
A benefit in kind still reducing your code after you gave the car or the insurance back.
Pension percentage applied to the wrong pay definition, for example basic only when your scheme covers total earnings.
National Insurance category C when you are nowhere near state pension age, or category A when you are past it.
An expense reimbursement that has been taxed as pay.
Missing overtime or a bonus paid in the wrong period, which distorts both tax and National Insurance for that month.

What to do when something is wrong

Split the problem in two. Anything about what you were paid - hours, rates, overtime, bonus, pension percentage, other deductions - belongs to your employer, and payroll can correct it in the next run. Anything about how the pay was taxed - the tax code, the student loan plan, benefits in kind, underpayments being collected - comes from HMRC, and only HMRC can change it. Use your personal tax account for the second category.

Keep every payslip. Employers are legally required to provide one, and the year-to-date figures on your final payslip of the year should reconcile exactly with your P60. If they do not, that discrepancy is worth chasing before the next tax year buries it.

Run the check

To go further than a glance, work through how to check you are paying the right tax. It turns the list above into a ten-minute audit with the calculator alongside.

Common questions

What is the difference between gross pay and taxable gross pay?

Gross pay is everything your employer pays you in the period. Taxable gross is what remains after deductions that are taken before tax, most often a net pay pension contribution or a salary sacrifice. If the two differ on your payslip, the gap is the pre-tax deduction, and it is the taxable gross figure that drives your income tax.

What does the NI category letter on my payslip mean?

It tells payroll which National Insurance rates apply. Category A is the standard letter for most employees. Category C applies to workers over state pension age, who pay no employee National Insurance. Categories H, M and V cover apprentices under 25, employees under 21 and qualifying veterans, where the employer pays a reduced rate.

What are the year-to-date figures for?

They show the running totals for the tax year from 6 April. They are the most useful numbers on the payslip because cumulative PAYE works from them, and because they let you check the whole year at once rather than a single month in isolation. Your March payslip year-to-date figures should match your P60.

My payslip is wrong - what should I do?

Work out first whether the error is in payroll or in your tax code. Wrong hours, wrong overtime, a missing bonus or a wrong pension percentage are payroll matters for your employer. A wrong tax code, a wrong student loan plan or wrong benefit deductions come from HMRC and must be corrected in your personal tax account.

Figures are for the 2026/27 tax year and assume National Insurance category A. Payslip layouts vary between payroll systems, so line names may differ from those used here. General information, not personal tax advice.