What's on your payslip?

Transcript

Whether you're paid weekly or monthly, nothing beats the buzz of having a pay slip fall into your hands. Pay slips are essential receipts of payment of your wages or salary, whether it's paid directly into your bank account or in cash.

Payments

This section includes your gross pay which shows how much you earn before deductions, and any additional payments such as expenses reimbursed to you... or, if you're lucky enough, a bonus payment!

Deductions

Deductions are separated into two: the first are fixed deductions such as pension contributions or trade union subscriptions. All fixed amounts must be agreed with you in writing before they're taken from your wages. Second are the variable deductions, which include National Insurance contributions, Income Tax and student loan repayments. These deductions are dependent on the gross amount you earn. Broadly speaking, the more you earn, the more tax you pay. These variable deductions are commonly known as Pay As You Earn or PAYE.

Did you know? If you've broken the law, a court order can force a debt or fine to be deducted directly from your wages. If so, it'll be listed in this section.

Method of Payment

Your pay slip should detail the method of payment to you: either cash, cheque or paid into a bank account. If directly into a bank account, your bank details will be included. This may be called a BACS payment.

The deductions total is subtracted from the gross pay total, leaving you with a 'Net Pay' amount. This is the all-important amount winging its way into your pocket.

Accumulated Amounts

Your pay slip may include some useful sums which calculate the amounts you've accumulated during your employment to date, such as pension, national insurance or student loan contributions.

Tax code & National Insurance number

Your National Insurance number and tax code may be included on your pay slip and are useful for future reference should you leave your employment, so it's a good idea to keep hold of your pay slips.

If you're still confused about your tax codes on your payslip, arrange a chat with your manager or HR department at work and ask them to explain it in more detail.
If you think you may be eligible for tax allowances and reliefs, check out DirectGov's guide. Read Advice Guide's more detailed breakdown to tax codes.
Advice Guide also provides useful information about common problems with PAYE.
To find out more about Income Tax, read TheSite.org's guide.
If your circumstances change during the tax year, e.g. if you become entitled to a new allowance or relief, you should inform HMRC – and your employer –as soon as possible.

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