A payslip is a document issued by your employers that includes all the details about your pay. It itemizes the income you’ve earned over a period of time before and after deductions and taxes. It’s important to review your payslip regularly to make sure you’ve been paid correctly and to guarantee you’ve been deducted the right amount.
Every payslip has the same details which is explained below:
- Gross pay – this is your full income before deduction or tax
- Variable deductions – this is the total of deductions that vary each payday including tax and National Insurance.
- Fixed deductions – these are the deductions that don’t change every payday
- Net Pay - this amount refers to your gross pay after the deductions have been taken off; in other words what you actually receive in your bank account
- The amount and method for any part payment of wage – this could refer to separate figures of a cash payment and the balance credited to a bank account.
- Year to Date (YTD)- this refers to the amount you’ve earned so far that year.
- Tax code - this code tells your employer what rate you should be taxed at.
There are eight other additional values you may find on yours, here’s what they mean:
- Your payroll number – this is the number the payroll department uses to distinguish between each employee
- The tax period – The number here represents the tax period for that payslip. For example, if you are paid monthly, this would translate as: 01 = April and 12 = March.
- Your National Insurance (NI) number – Your NI number confirms that you’re eligible for work in the UK.
- Expenses – the expenses you are owed should be described here – however, expenses can be paid separately
- Pensions – If you’re paying towards a workplace pension that your company has set up or arranged access to, the amount you’re contributing will be shown.
- Student loan – If you’re making student loan repayments, this will be shown on your payslip.
- Workplace benefits – If your benefits go through your payroll, they should be taxed here. If you get health insurance or have a company car through an employment scheme, these will be listed on your wage slip.
- BACS – Bankers Automated Clearing Services: A payment scheme that processes financial transactions electronically.
- BA/BP – Bereavement Allowance/Bereavement Payment: A weekly allowance given to widowers or surviving civil partners.
- CHB – Child Benefit: An allowance given to parents with children under 16.
- CTC – Child Tax Credits: An allowance given to parents with children under 16.
- ET – Earnings Threshold: The amount you can earn before being required to pay tax.
- HMRC – Her Majesty’s Revenue and Customs: The department of government responsible for tax collection.
- LEL – Lower Earnings Limit: The amount you can earn before being required to pay National Insurance.
- NIC – National Insurance Contributions: A sum deducted from your salary, in addition to tax.
- PAYE – Pay As You Earn: A tax deduction taken from HMRC.
- PILON – Payment in Lieu of Notice: A compensation payment that covers the notice period of an employee who has been terminated/told not to work their notice.
- PP – Personal Pension: Payments made to a pension provider.
- SAP – Statutory Adoption Pay: An allowance given to people during the leave they take to adopt a child.
- SEE – Small Earnings Exception: An exemption of Class Two National Insurance contributions, given to self-employed people whose profits are less than £5,725 a year.
- SMP – Statutory Maternity Pay: An allowance of 39 weeks, given to female employees during the leave they take before and after having a child.
- SPP – Statutory Paternity Pay: An allowance of 2 weeks, given to male employees during the leave they take before and after having a child.
- SSP – Statutory Sick Pay: Pay given to employees who have been absent from work due to illness.
- TY – Tax Year: The year in which tax is calculated, starting 6th April in the UK.
If you are ever unsure about your payslip, contact your employer or visit https://www.moneyhelper.org.uk/en