Congratulations on your new job! We hope you’re enjoying your new role. 

As for your payslip, we can help you with that. It can be tricky to get your head around all the information on there, but it’s really important to understand – so this is a great question. 

Your payslip will show you your pay, deductions and tax information. All employers are required to give their employees a payslip, and it’s a good idea to keep your payslips for as long as possible. 

You’ll usually find your employer’s details on the top left corner of your payslip. Opposite this, in the middle or top right corner, should be your details. This is also where you might find your payroll or employee number, this is what your employer uses to identify you for payroll purposes. 

Next, you’ll see lots of different numbers and codes. The payment date is when your pay will normally arrive in your bank account – it can be monthly or weekly and can fall on any day of the month. 

Your National Insurance (NI) number refers to your unique number. You must have a NI number to work in the UK. It’s used make sure all your NI contributions are recorded and so you can get any state benefits you’re entitled to, including state pension later in life. 

Your payslip might show a tax period – the tax year starts in April and ends in March. The number here corresponds to the period in which you’re being taxed, for example if you’re paid monthly, ‘01’ will represent the tax period in April, while ‘12’ would mean March. 

Next is your tax code. This is decided by HM Revenue and Customs (HMRC) and is used by your employer or pension provider to work out how much Income Tax to take from your pay. Your tax code is made up of several numbers and a letter. The number refers to how much tax-free income you get, while the letter can mean different things depending on your circumstances. Visit the gov.uk website to find out what your tax code means.

It’s important to check you’re not on an emergency tax code. If you are, you’ll pay more tax than you need to. 

Moving on to your pay and deductions. ‘Gross pay’ means how much you’ve earned before anything is deducted. Deductions are amounts taken from your gross pay, with common deductions including: Income Tax, National Insurance, pension or student loan payments. Income Tax is the tax you pay on your earnings to fund public services. It’s something you have to pay, but the amount will vary depending on your earnings. You pay National Insurance so you can be entitled to certain benefits, and to contribute to the NHS. 

Most payslips will add up all the deductions from your pay into a single amount to make it easier for you to see how much is taken from your pay each month. Your ‘net pay’ is the amount of money you will receive after all the deductions have been taken. 

Lastly, ‘taxable pay’ is the amount of your salary, to date in the current tax year, that has been subjected to tax. This will usually appear next to your net pay figure. 

Contact us for more information about this topic or for advice on another pay issue.