How to Read Your UK Payslip (Line by Line)

What is a payslip and what must it show?

A payslip is the itemised statement your employer must give you each time you are paid, showing how your gross pay becomes the net amount in your bank account. In the UK, almost all employees have a legal right to a written payslip on or before payday.

By law it must show your gross pay, the amount and type of every variable deduction, your net (take-home) pay, and — where relevant — how the pay is worked out if it varies by hours worked. Fixed deductions can be shown as a single total if you get a separate annual statement breaking them down.

Gross pay vs net pay: the two numbers that matter most

Gross pay is what you earn before anything is taken off — your salary for the period plus any overtime, bonus or commission. Net pay is what is left after all deductions, and it is the figure that actually lands in your bank account.

The gap between the two is the total of your deductions. On a £35,000 salary paid monthly, gross pay is about £2,917 a month, but net pay is typically around £2,300 once income tax, National Insurance and pension are taken off.

What does my tax code mean?

Your tax code tells your employer how much tax-free pay to give you before deducting income tax. The most common code for 2026/27 is 1257L, which reflects the standard £12,570 Personal Allowance spread evenly across the year.

Letters and different numbers change the meaning. A code ending in 'W1' or 'M1' is an emergency code applied on a non-cumulative basis, 'BR' taxes all the pay at basic rate (common on a second job), 'K' codes add income rather than allowance, and an 'S' or 'C' prefix means Scottish or Welsh rates. Check your code against your Personal Tax Account if it looks unusual — a wrong code is the number-one cause of paying too much or too little tax.

• 1257L — standard £12,570 tax-free allowance.
• BR — all income taxed at 20% (often a second job).
• D0 / D1 — all income taxed at 40% / 45%.
• W1 / M1 — emergency, non-cumulative code.
• S / C prefix — Scottish or Welsh taxpayer.

PAYE income tax on your payslip

Income tax is collected through PAYE (Pay As You Earn) and shown as a separate deduction line. Your employer works out the tax due each pay period using your tax code, so the tax-free allowance and the 20%, 40% and 45% bands are applied gradually across the year rather than all at once.

Because PAYE is usually cumulative, a change in pay — a bonus, a pay rise or a month of overtime — is smoothed against your year-to-date position. If too much tax was taken earlier, a cumulative code can refund it automatically in a later month.

National Insurance: the other big deduction

National Insurance (NI) is a separate deduction from income tax, with its own thresholds. For employees on category letter A in 2026/27, you pay 8% on earnings between £12,570 and £50,270 a year, then 2% on anything above £50,270.

Unlike income tax, standard NI is not cumulative — it is worked out on each pay period in isolation. That is why a single high-earning month (say a big bonus) can take a larger NI slice than usual, without being smoothed across the year.

Pension, student loan and other deductions

Below tax and NI you will often see a workplace pension contribution. Under auto-enrolment the standard minimum is 5% from you and 3% from your employer, and your contribution usually reduces the pay that is taxed (relief given at source or via net pay, depending on the scheme).

Student loan repayments appear as their own line once your income passes the plan threshold — for example 9% of income above the Plan 2 threshold. You may also see deductions for salary sacrifice benefits, share schemes, union fees or attachment of earnings orders.

What do the year-to-date (YTD) figures mean?

Year-to-date columns show your running totals since the tax year began on 6 April: total gross pay, total tax, total NI and total pension so far. They are how you check whether your tax looks right across the whole year rather than a single month.

If your YTD tax seems high relative to your YTD pay, an emergency or incorrect tax code is the usual culprit. The YTD figures also feed your P60 at year end, so it is worth a quick sense-check each month.

Other things you'll spot on a payslip

Beyond pay and deductions, your payslip usually carries admin detail: your National Insurance number, employee/payroll number, PAYE reference, pay date, tax period number and your chosen payment method. Some employers also show your holiday balance or a message about pay changes.

Keep your payslips for at least a couple of years. They are the evidence you need for a mortgage application, a tax query with HMRC, or a claim for a tax refund if your code was wrong.

How to check your payslip is correct

Run three quick checks each payday. First, confirm gross pay matches your contracted salary or the hours and rate you worked. Second, check the tax code matches the code on your latest HMRC notice or Personal Tax Account. Third, make sure gross pay minus every deduction equals the net pay shown.

If something looks off, raise it with payroll in the same tax month — errors are far easier to correct before the next run. Use our PAYE Salary Calculator to reproduce the expected tax, National Insurance and pension for your salary and compare it line by line.

Work out your expected take-home pay

Use our PAYE Salary Calculator UK to turn your gross salary into an expected net figure, then cross-check each deduction with the Income Tax Calculator and National Insurance Calculator. To see how boosting your pension changes both your tax and your take-home pay, try the Pension Contribution Calculator. Figures are estimates for 2026/27 — always check your official payslip and GOV.UK.