Your payslip contains essential information about your earnings and deductions, but many UK workers find them confusing. Here is a plain-English guide to every section.
Gross pay. This is your total earnings before any deductions. It includes your basic salary plus any overtime, bonuses, or commission.
Tax code. Your tax code tells HMRC how much tax-free income you are allowed. The standard code for 2025-26 is 1257L, meaning you can earn £12,570 before paying income tax. If your tax code looks wrong, contact HMRC — you could be overpaying.
Income tax. Tax is calculated on your earnings above the personal allowance. The basic rate is 20 percent on income between £12,571 and £50,270. The higher rate is 40 percent on income between £50,271 and £125,140.
National Insurance. Class 1 NI contributions are 8 percent on earnings between £12,570 and £50,270, and 2 percent on earnings above that. These fund your state pension and certain benefits.
Pension contributions. If you are auto-enrolled, the minimum employee contribution is 5 percent of qualifying earnings. Your employer contributes at least 3 percent. Check whether your pension contributions are taken before or after tax — this affects the amount.
Student loan repayments. If you have a student loan, repayments are deducted automatically once you earn above the threshold. Plan 2 threshold is £27,295 and you repay 9 percent of earnings above that.
Net pay. This is your take-home pay after all deductions. It is the amount that lands in your bank account.
Always check your payslip matches what you expected. Errors are more common than you might think.
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