Your payslip is a legal document that your employer must give you on or before payday, and most people never read it properly. This guide explains every line for the 2026/27 tax year, works through an example, and lists the checks that catch most mistakes.
What must be on it
By law a UK payslip has to show your gross pay, each deduction and what it is for, your net pay, and, where your pay varies with hours worked, the number of hours. Everything else (tax code, National Insurance number, year-to-date totals) is standard but not compulsory.
Line by line
Gross pay
Everything you earned before deductions: basic pay, overtime, bonus, holiday pay, sick pay. If you are hourly, check the hours against your own record and the rate against your contract. For context, across 379,128 live adverts on CareerAlert on 19 October 2026, the typical advertised salary was £41,769 a year and entry-level hourly roles typically advertised £13 to £15.
Tax code
The most common code for 2026/27 is 1257L, meaning you can earn £12,570 in the year before paying income tax. Codes to look out for:
- BR: all your pay taxed at 20%, usually because this is a second job or your employer has no details for you. Fine for a second job; wrong for your only job.
- 0T: no tax-free allowance, often because you did not hand in a starter checklist or P45.
- Emergency codes (W1, M1, X on the end): each pay period is taxed on its own without looking at the year so far. Usually corrects itself; check after two months.
- K codes: you owe tax from elsewhere and it is being collected through pay.
Your code is set by HMRC, not your employer. If it looks wrong, check your personal tax account on gov.uk.
Income tax (PAYE)
For England, Wales and Northern Ireland in 2026/27: nothing on the first £12,570, 20% from there to £50,270, 40% to £125,140, 45% above. Scotland has its own bands and rates. The thresholds have been frozen for several years, which is why a pay rise can push more of your pay into a higher band.
National Insurance
Employees pay Class 1 NI at 8% on earnings between £12,570 and £50,270 a year (worked out per pay period), and 2% above that. You do not pay NI once you reach State Pension age; tell your employer if that applies.
Pension
If you are 22 or over and earn above £10,000 you will have been enrolled automatically. The minimum is 8% of qualifying earnings in total, of which you pay at least 5% (less, after tax relief) and your employer at least 3%. Your contribution appears as a deduction; the employer's often appears separately as information. Opting out is possible but you lose the employer's money.
Student loan
Deducted as a percentage of pay above a threshold that depends on your plan type (Plan 1, 2, 4, 5 or Postgraduate). The thresholds change each April; the current figures are on gov.uk. If you are repaying under the wrong plan, your employer has the wrong starter information: fix it with payroll.
Other deductions
Salary sacrifice (cycle, car, extra pension), union subs, attachment of earnings orders, and repayment of advances or training costs. Each must be named. An employer cannot deduct anything not required by law unless your contract allows it or you agreed in writing in advance.
Net pay
What reaches your bank. If it is not what you expected, the difference is almost always tax code, NI on a one-off payment, or a pension change.
A worked example
Salary £30,000, code 1257L, auto-enrolment pension at 5%, no student loan, paid monthly, England:
| Line | Monthly |
|---|---|
| Gross pay | £2,500.00 |
| Income tax (20% on pay above £1,047.50) | £290.50 |
| National Insurance (8% on pay above £1,047.50) | £116.20 |
| Pension (5% of qualifying earnings, before tax relief) | about £99 |
| Net pay | about £1,994 |
Your exact figures will differ slightly depending on how your scheme handles tax relief and rounding, but if your payslip is more than a few pounds away from this shape on a similar salary, something is wrong.
Five checks that catch most mistakes
- Tax code is 1257L (or you know why it is not).
- Hours and rate match your contract and your own record.
- Hourly rate is at least the National Living Wage (£12.71 for over-21s from April 2026) after any uniform or equipment deductions.
- Pension deduction matches the percentage you agreed, and the employer contribution is shown.
- Year-to-date totals add up month on month.
FAQ
Why has my tax code changed?
Usually because HMRC has received new information: a second job, a company benefit, underpaid tax from a previous year, or a change in your personal allowance. The letter explaining it is in your personal tax account.
Can my employer deduct money from my wages?
Only for tax, NI, court orders, things your contract allows, or things you agreed to in writing before the deduction. Deductions for till shortages or uniform are allowed only where the contract says so, and never below the minimum wage for most workers.
What do I do if my payslip is wrong?
Raise it with payroll in writing with the specific line and the figure you expected. If it is not fixed, you can raise a grievance and, for unlawful deductions, bring a tribunal claim within three months of the deduction. ACAS gives free advice.
Next step
If you are checking a payslip because you are thinking of moving, see what similar roles advertise: set up a free job alert and compare. Our guide to negotiating a higher salary covers how to use the figures.
CareerAlert Editorial Team
Guides written by the CareerAlert team from the UK job adverts on the platform. Pay figures and counts come from live adverts and are refreshed when the guide is updated.
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