Have you ever been confused about what your payslip means? Well, we’re here to help! We’ll explain how your payslip works and what each aspect of it means in a way that clear and easy to understand.
Above is an example of a payslip. We’ll work through these on a row by row basis with keywords and their meanings at the end.
In the first row will be your employer (the company you work for), your name and the date of the payslip.
This will have the department if it is applicable, followed by your national insurance number and table. The table is a letter (for example, A) which categorises you based on how much national insurance you need to contribute. Your tax code allows your employer to know how much tax to deduct from your wages based on your code given by HMRC. Your payment method is how you are paid, for example BACS which is a bank to bank transfer. Then the period is the month you are being paid for (eg. May 2022).
Then we have the next row which has year to date. This is a summary of everything that has been paid to you in that year. Your rate hours will tell you the number of hours worked and your hourly rate. This may be blank if you work by an annual salary rather than an hourly basis. The payment section will tell you all of the payments that have been paid to you for that month. The deductions sections will tell you of any deductions taken from your overall wage that month. This is typically income tax and national insurance. It can also include sick pay, maternity pay and others.
In the bottom right section you will see an overall total for specific sections, see below for what these mean as well for those in the ‘year to date’ section.
- Taxable Pay = The amount of your earnings that have been taxed
- N.I Employee = The amount that has gone towards your national insurance
- N.I Employer = The amount of national insurance your employer has paid based on your earnings
- SSP = Statutory Sick Pay (if you’ve been off work sick). This will also show in the deductions column
- SMP= Statutory Maternity Pay
- Pension Employee = How much of your earnings have contributed to your pension
- Pension Employer = How much your employer has paid into your pension
- Basic Pay = Your standard monthly payment
- Income Tax = Tax you pay to the government based on your earnings which is used to fund public services such as the NHS
- Total/ Gross Pay = How much you have earned before any deductions are taken
- Deductions = How much was deducted from your total/ gross pay
- Net Pay = The amount of money you will actually receive