How to Read a Payslip — UK Guide

Basic Pay / Gross Pay

Your total earnings for the period before any deductions. Includes base salary plus overtime, bonuses, or allowances.

Tax Code

e.g., 1257L — tells your employer your tax-free allowance. The number × 10 = your annual allowance. Check it's correct on every payslip. See our Tax Codes guide.

Income Tax

The PAYE tax deducted based on your tax code and the amount you've earned so far this year. Typically 20% (basic rate) or 40% (higher rate) on earnings above your personal allowance.

National Insurance (NI)

Employee NI deducted at 8% on earnings between £1,048–£4,189/month (2026/27), 2% above. Separate from income tax and funds the State Pension and NHS.

Pension Contribution

Your contribution to your workplace pension. May be shown as a salary sacrifice deduction (pre-tax) or a regular deduction. Reduces your taxable income if via salary sacrifice.

Student Loan Deduction

If applicable — repaid at 9% on earnings above your plan's threshold. Plan 1: £24,990. Plan 2: £27,295. Plan 4: £31,395. Plan 5: £25,000.

Net Pay

The amount paid into your bank account after all deductions. This is your take-home pay for the period.

YTD (Year to Date)

Cumulative totals from 6 April. Useful for checking your total tax and NI paid so far in the tax year. Used at year end by HMRC to reconcile your tax position.