UK Payslip Explained: What Every Line Means (2026)

Why this matters right now: The tax-free personal allowance has been frozen at £12,570 since 2021 and stays frozen for years to come. As wages rise, more people quietly slip into higher tax bands — which means your payslip deductions can grow even when nothing about your job has changed.At a glance

• By law, almost every UK employee must get an itemised payslip on or before payday — including part-time and agency workers.
• Your payslip must show gross pay, every deduction and what it's for, net pay, and the pay period it covers.
• Most payslip problems come down to one thing: the wrong tax code. Check it first, before anything else.
• Income tax and National Insurance are calculated separately, using different thresholds — which is why they don't move in step.
• Employers must fix genuine payroll mistakes, but they can also legally reclaim money they overpaid you.
• Not legal or financial advice: This article explains the rules in plain English. For your specific situation, speak to your payroll department, an accountant, or Citizens Advice.

Most of us do the same thing every month. The payslip lands, we glance at the number at the bottom, decide whether it looks roughly right, and move on.

The problem is that everything interesting happens above that number. A wrong tax code, a student loan plan you finished repaying, a pension contribution that changed when you weren't looking — none of it announces itself. It just quietly shrinks what lands in your account.

Payslips are also written in a shorthand nobody ever teaches you. This guide walks through every section of a typical UK payslip, explains what the codes mean, and shows you exactly what to check.

What your employer legally has to show you

Since April 2019, all workers — not just salaried employees — have the right to an itemised payslip. It has to arrive on or before payday, and it can be paper or electronic.

It must show:

• Your gross pay before any deductions
• The amount and purpose of every variable deduction
• The amount of any fixed deductions (or a separate standing statement explaining them)
• Your net pay — the amount actually being paid to you
• If your pay varies by hours worked, the number of hours being paid

If you're paid partly by cash and partly by bank transfer, the payslip has to break that down too.

The top section: who you are and what period this covers

This part looks boring, but it's worth a ten-second check.

Payroll number

Your unique reference within your employer's system. Quote it whenever you contact payroll.

Pay date and pay period

The period is the stretch of work you're being paid for. "Month 7" doesn't mean July — the UK tax year starts on 6 April, so Month 1 is April, Month 7 is October. Weekly payrolls use Week 1 to Week 52 the same way.

National Insurance number

Check this is correct. A wrong or missing number can mean your contributions don't get credited to your record, which affects your State Pension years later.

Your tax code — the single most important thing on the page

Your tax code tells your employer how much tax-free pay you get. Get it wrong and every other number is wrong too.

The standard code

1257L is the most common. The number is your tax-free allowance with the last digit removed — 1257 means £12,570 a year, spread evenly across your pay periods. The letter L simply means you get the standard allowance.

Other letters you might see

• BR — all of this income is taxed at the basic rate, with no allowance. Normal for a second job. Alarming on your only job.
• D0 / D1 — all income taxed at the higher or additional rate.
• M or N — you've received or transferred part of the Marriage Allowance.
• K at the start — you have untaxed income or benefits worth more than your allowance, so tax is added rather than deducted.
• S or C at the start — Scottish or Welsh rates apply.
• W1, M1 or X at the end — an emergency code. Each pay period is taxed in isolation, ignoring what you've already earned this year. Common after starting a new job.

Emergency codes usually correct themselves once HMRC catches up, and any overpaid tax comes back automatically. But if it's still there after two or three pay periods, chase it.

Not sure what your payslip is telling you? Upload it to Clarify and ask in plain English — "why did my take-home pay drop this month?" or "what does tax code BR mean for me?" You get a straight answer with the exact lines on your own document cited, so you can see where each figure came from.

Try Clarify free → getclarify.co.uk

Gross pay and what makes it up

Gross pay is everything you've earned before deductions. On a simple salaried payslip it's one line. On others it's broken into basic pay, overtime, bonus, commission, holiday pay, or statutory payments like sick pay or maternity pay.

You'll usually see two columns: the amount for this period, and the year-to-date total since 6 April. The year-to-date figures are genuinely useful — they're how you sanity-check whether your annual tax is on track.

The deductions, line by line

Income tax (PAYE)

Deducted using your tax code. Above your personal allowance, England, Wales and Northern Ireland use a basic rate, then a higher rate, then an additional rate. Scotland has more bands with different thresholds — which is why an S code changes the maths.

PAYE works cumulatively. Each payday, your employer recalculates what you should have paid so far this tax year and adjusts. That's why a bonus month can look brutally taxed and the following month lighter.

National Insurance

Calculated on each pay period separately, not cumulatively — so unlike tax, it doesn't even out across the year. You pay a main rate on earnings between the primary threshold and the upper earnings limit, then a much lower rate above that.

Your NI letter (A, B, C, H, M and so on) reflects your category — most employees are A. It affects the rate applied, so if yours looks unusual, ask.

Pension contributions

Under auto-enrolment, most employees contribute a percentage of qualifying earnings, with the employer adding more on top. How it appears depends on the scheme:

• Net pay arrangement — taken from gross pay, so you get tax relief immediately.
• Relief at source — taken after tax, with basic-rate relief added into your pot by the provider. Higher-rate taxpayers have to claim the rest through Self Assessment.
• Salary sacrifice — your gross salary is formally reduced, which lowers both tax and National Insurance.

Student loan repayments

Shown as a plan number — Plan 1, 2, 4, 5, or a separate Postgraduate Loan line. Each plan has a different income threshold and repayment percentage, and you can be repaying two at once. Repayments only start above the threshold for your plan.

Other deductions

Season ticket loans, cycle-to-work schemes, union subscriptions, childcare arrangements, charitable giving, or an attachment of earnings order from a court. Every one of these must be itemised.

What to actually check each month

1. Tax code. Compare it to your latest HMRC coding notice. Unexpected changes are the number one cause of wrong pay.
2. Hours and rates. If you're hourly or did overtime, check the hours match what you worked.
3. Deductions you don't recognise. Ask. A deduction you never agreed to is generally unlawful unless the contract allows it or the law requires it.
4. Student loan plan. Check you're on the right plan — and that repayments have stopped if you've cleared the balance.
5. Pension. Confirm both your contribution and your employer's are going in.
6. Year-to-date totals. If they jump strangely between months, something has been restated.

If something looks wrong

Start with payroll, in writing. Say which pay period, which line, and what you think it should be. Most errors are administrative and get fixed in the next run.

If it's a tax code problem, HMRC — not your employer — is the one who sets it. You can check and correct your code through your Personal Tax Account, and your employer will apply the new code once HMRC issues it.

If you've been underpaid and payroll won't fix it, that's an unlawful deduction from wages, and there are formal routes to challenge it. If you've been overpaid, be careful: employers are generally entitled to reclaim the money, though you can usually negotiate a sensible repayment schedule rather than losing it all in one go.

Keep your payslips. You'll want them for mortgage applications, benefit claims, and any dispute — and they're the only reliable record of what you were actually paid.

Comparing payslips shouldn't take an evening. Upload this month's and last month's to Clarify and ask what changed. It reads both, points to the specific lines that moved, and explains why — in plain English, with citations you can check yourself.

Make sense of your payslip → getclarify.co.uk

Frequently asked questions

Why did my take-home pay drop when my salary didn't change?

The usual suspects are a tax code change, a pension contribution increase, a student loan crossing its threshold, or last month including overtime or a bonus you've now noticed the absence of. Compare the deduction lines side by side — the culprit is nearly always visible.

What does tax code BR mean if this is my only job?

It means you're being taxed at the basic rate on everything, with no tax-free allowance applied. On a second job that's correct. On your only job it usually means HMRC doesn't have full details yet, and you're likely overpaying. Contact HMRC to get it corrected — overpaid tax is refunded.

Is my employer allowed to deduct money without telling me?

Only where the law requires it (tax, National Insurance), your contract clearly permits it, or you've agreed to it in writing. Any deduction must still be itemised on your payslip. Unexplained deductions should be queried immediately.

What's the difference between net pay arrangement and relief at source?

Net pay arrangement takes your pension contribution from gross pay, giving you tax relief straight away. Relief at source takes it after tax, and the provider adds basic-rate relief to your pot. Higher-rate taxpayers on relief at source need to claim the extra relief themselves.

Do I still pay National Insurance after State Pension age?

No. Once you reach State Pension age you stop paying Class 1 National Insurance on employment income, though your employer continues paying their share. You'll still pay income tax as normal.

Why is my bonus taxed so heavily?

It usually isn't, in the end. PAYE assumes your current pay level continues for the rest of the year, so a one-off spike can push you temporarily into a higher band. Because tax is calculated cumulatively, the following months correct it automatically.

I've paid off my student loan — why is it still being deducted?

There's often a lag between the Student Loans Company confirming the balance is clear and your employer being told to stop. Contact the SLC directly. Any overpayment after the loan was settled can be refunded.

How long should I keep my payslips?

Keep at least the last three months easily to hand for mortgage and rental applications, and hold on to your P60 for several years. Digital copies are fine — just make sure you can still access them if you change employer.

Related articles

• What "inside" or "outside IR35" really means on your contract
• Self-assessment jargon decoded: a plain-English guide
• Decoding HMRC letters: every reference code and what to do next
• What your pension statement actually means

This article is general information only and is not legal, tax, or financial advice. Tax rates, thresholds, and repayment plans change, so always check the current figures on GOV.UK. For help with your own circumstances, speak to your payroll department, a qualified accountant, or Citizens Advice.