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Understanding Payslips


1. Full time work 2. Part time work 3. Understanding payslips
4. National Insurance 5. P45 and P60 explained 6. Income tax
7. Tax codes - what are they? 8. Pension 9. Getting a job

3. What is a payslip?

When you start work or an apprenticeship you will receive a payslip.  All employees — casual, part-time, apprentices, and full-time — are entitled to an individual, detailed written payslip, either when or before you are being paid.  Payslips do not have to be written on paper — it can be sent to you by an email or accessed through a website.

 

Understanding your payslip

Your payslip must contain the following information:

  • Payroll Number - Payroll Number is used by some companies to help the payroll department to identify each employee.  Some companies may also call this your employee number";
  • Your gross pay - This is your FULL pay before any tax or National Insurance has been taken off;
  • Your net pay - This is your FULL pay after all other deductions, i.e. tax, national insurance, pension has been removed.  This is the amount that you will be sent to your bank account.

Your payslip also might include:

  • Your tax code - Tax code is what your employer uses to work out how much Income Tax to take away from your pay;
  • National Insurance (NI) number - Your National Insurance number is unique to you and will never change.  It is made up of letters and numbers and you only pay National Insurance when you are 16 or over and either:
    • You earn £162 or more a week, or
    • You are self-employed making a profit of £6,025 or more a year;
  • Pay rate (hourly or annual) - Your pay rate is the amount you get paid either hourly or annually.  Some payslips will show how your gross pay is worked out.

For example:

Your hourly rate × Number of hours worked = Gross Pay

Your hourly rate × Number of hours worked - Tax, NI and other deductions = Net Pay


The National Minimum Wage changes every April.  Currently, the minimum hourly wage is:

Age/status Hourly pay
Apprentice

£3.90

Under 18 £4.35
18 to 20 £6.15
21 to 24 £7.70
25 and over £8.21

 

Some companies may have their own hourly rate which could be more than the National Minimum Wage, however you cannot be paid any less than the minimum.

Any additional pay deductions from your wage may include:

  • Court Orders;
  • Child Maintenance;
  • Student Loan;
  • Pensions;
  • Expenses;
  • Bonuses/Commission;
  • Maternity/Paternity Pay;
  • Other Deductions (union subscriptions);
  • Expenses;
  • Sick Pay;
  • Workplace Benefits

You can find lots of advice about payslips on the Money Advice Service website.

If you have concerns or you are confused about your payslip, speak to somebody in the payroll department of your organisation or workplace.


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Part time work
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