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How do I read a payslip?

Gross, net, and every deduction in between — what each line means and what to check each month.

Difficulty
beginner
Time
20 min
Read
2 min
Safety
caution

Short answer

Check the tax code, the hours or salary, and the year-to-date totals every month. The tax code is the entry most likely to be wrong and the one that costs the most when it is.

Most people look at one number on a payslip. The other lines are where errors hide, and payroll errors are common enough that a two-minute check each month is worthwhile.

Safety

This explains what the entries on a payslip generally mean. It is not tax or employment advice, and individual circumstances vary. For a specific problem with your pay or tax, speak to your employer's payroll team or the tax authority directly.

Step by step

  1. Find gross pay and net pay.Gross is before deductions, net is what reaches your account. Everything between them is a deduction that should be itemised.
  2. Check the tax code.The most consequential entry. It determines how much tax is taken, and a wrong code — often after a job change or a benefit starting — can cost a great deal over a year. Codes ending in L are the standard type.
  3. Check National Insurance.A separate deduction with its own thresholds. The letter next to it indicates your category, which affects the rate.
  4. Look at pension contributions.Yours and, separately, your employer's. Employer contributions are part of your total reward and do not reduce your take-home pay.
  5. Check hours, overtime and any variable pay.Where errors most often appear for hourly and shift work. Compare against your own record rather than assuming.
  6. Look at the year-to-date figures.Cumulative gross, tax and National Insurance. Useful for spotting a problem that has been building for months rather than one bad month.
  7. Understand any student loan deduction.Taken as a percentage above a threshold, and the plan type determines the threshold. Check the plan shown is the right one for when you studied.
  8. Query anything unclear with payroll, in writing.You are entitled to an itemised payslip and to understand it. A written query creates a record if a correction is needed later.

Tips

  • Check the tax code after any change — new job, second job, company car, benefits starting or ending. That is when codes go wrong.
  • Keep payslips for six years. They are what you need if a tax question arises later.
  • An emergency tax code usually corrects itself, but not always. If it persists beyond a month or two, contact the tax authority directly.

Questions people ask

What is the most important thing to check on a payslip?

The tax code. It determines how much tax is deducted, it goes wrong most often after a job or benefit change, and it costs the most when it is wrong.

Why is my take-home pay different each month?

Variable hours or overtime, a tax code change, a pension change, or cumulative tax adjusting after a previous error. The year-to-date figures usually show which.

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