A UK payslip is a monthly receipt for how much of your salary HMRC and others kept before your bank saw it. Most people glance at the bottom number and move on — until the bottom number is wrong. Wrong usually means a tax code issue, an emergency tax default, a bonus taxed at marginal rates, or a pension line you forgot you ticked on the benefits portal.
This guide walks through a typical PAYE payslip for 2025/26: gross pay, tax code, PAYE Income Tax, employee National Insurance, student loan deductions, pension, and net pay. We explain the year-to-date (YTD) columns, common abbreviations, and the surprises that generate panicked Slack messages. For the maths behind the deductions, see how UK take-home works; for code letters specifically, see tax codes explained.
The payslip layout — top to bottom
Layouts vary by payroll provider (ADP, Sage, Workday, NHS ESR, etc.) but the information set is standard. Expect:
- Employee details — name, NI number, payroll number, pay period dates
- Payments — basic salary, overtime, bonus, statutory pay
- Deductions — tax, NI, pension, student loan, union fees, cycle scheme
- Tax code — often in the header or a dedicated box
- Year-to-date totals — cumulative gross, tax, NI for the tax year
- Net pay — the transfer amount
Some payslips show “taxable pay this period” separately from gross — useful when salary sacrifice reduces the tax base but gross headline stays familiar.
Gross pay — the starting figure
Gross is total cash earnings before statutory deductions. For a £48,000 salary paid monthly, basic gross is £4,000 per month (£48,000 ÷ 12). Add overtime, commission, or a bonus and gross rises for that period only.
Common confusions:
- Pro-rata first month — start mid-month and gross may be partial, not salary ÷ 12
- Salary sacrifice — pension or childcare may reduce “taxable gross” before tax lines; some payslips show sacrifice as a negative payment line
- Back pay — a lump correction inflates one period’s gross and tax disproportionately on cumulative PAYE
Tax code — the instruction to payroll
Your tax code tells payroll how much tax-free pay to apply. The most common code in 2025/26 is 1257L: £12,570 personal allowance encoded as 1257 (allowance ÷ 10), with L meaning standard cumulative allowance.
Scottish taxpayers may see S1257L — same allowance, Scottish Income Tax bands applied. Wrong codes cause systematic over- or under-tax until HMRC updates. Check yours on the HMRC app or Personal Tax Account.
Red flags on payslips:
- BR — all pay taxed at 20% with no allowance on that job (~£209/month less at £50k)
- D0 / D1 — emergency higher/additional rate on everything
- 0T — no allowance; normal band progression
- K prefix — negative allowance; you owe tax on untaxed benefits
- W1 or M1 suffix — non-cumulative week-1/month-1 basis
Full code breakdown: tax codes guide and emergency tax guide.
PAYE — Income Tax line
PAYE (Pay As You Earn) is Income Tax collected at source. The payslip line may say “Income Tax”, “PAYE Tax”, or “Tax”. Amount depends on:
- Taxable pay this period (after pension sacrifice if applicable)
- Your tax code (allowance spread, or emergency flat rate)
- Cumulative position — year-to-date tax owed vs year-to-date tax paid
On 1257L cumulative, month-one tax on £4,167 gross (£50k salary) is roughly £415. On BR, it is 20% × £4,167 = £833 — nearly double. The payslip will not explain why; the code box will.
National Insurance — separate line
Employee National Insurance appears as “NI”, “Nat Ins”, or “National Insurance”. For 2025/26, employees pay 8% on earnings between £12,571 and £50,270 annually, and 2% above that. NI is calculated on gross (with minor exceptions for some pension structures) — not on post-tax income.
Monthly NI on £4,167 gross: roughly £250 (8% × (£4,167 − £1,047.50 monthly allowance equivalent)). At £50k annual gross, total employee NI is about £2,994/year. NI does not change when your tax code is BR — only Income Tax does. That is a useful diagnostic: if tax is high but NI looks normal, suspect the code.
Student loan — SL Plan lines
Student loan deductions show as SL Plan 1, Plan 2, Plan 4, Plan 5, or PGL (postgraduate loan). Each plan has a threshold and rate:
- Plan 2 — 9% on earnings above £29,385 (2025/26)
- Plan 5 — 9% above £25,000
- Postgraduate — 6% above £21,000
On £50,000 gross with Plan 2: 9% × (£50,000 − £29,385) ≈ £1,855/year (~£155/month). Loans are taken after tax and NI. They do not reduce your taxable income. See student loan guide for plan comparisons.
Pension — sacrifice vs net pay
Pension lines vary:
- Salary sacrifice — shown as a reduction before tax; lowers Income Tax and NI
- Relief at source — contribution from net pay; basic-rate tax relief claimed by the scheme
- Employer contribution — often not on payslip as your deduction; still worth checking total comp
Example: £50k with 5% sacrifice (£2,500/year). Taxable gross becomes £47,500 — saving roughly £500/year in tax and NI versus paying from net. Your payslip net drops, but your pension pot rises. Pension sacrifice guide has the full trade-off.
Net pay — the bottom line
Net pay (take-home, “paid to bank”) equals gross minus all deductions. This is the BACS amount. If it does not match your bank, check:
- Post-net deductions (some employers deduct charity, union, or attachment orders after net — rare but real)
- Multiple payments in one period (expenses reimbursed separately)
- Timing — payslip date vs payment date crossing month end
Year-to-date (YTD) — the hidden explainer
YTD columns sum figures from 6 April (start of tax year) to this pay period. Payroll compares:
- YTD gross vs expected annual trajectory
- YTD tax paid vs tax that should have been paid on cumulative basis
Why YTD matters:
- Bonus month — tax spike is often correct on cumulative PAYE; following months may look “too low” as the system rebalances
- Job change — YTD resets on new employment; P45 links previous tax paid
- Code correction — when BR becomes 1257L, later months under-tax to claw back overpayment — watch YTD tax, not just this period
If month 7 tax is half of month 6 after a code fix, that is often healthy cumulative correction — not payroll “giving you money back” randomly.
Worked example: £50,000 salary, normal payslip
Monthly breakdown — England, 1257L, no pension, no student loan:
Annual net ≈ £39,520. Cross-check on £50k salary table or TaxBite.
Worked example: same salary, emergency BR code
Same £4,167 gross but code BR in month one:
Extra tax ~£418 that month — personal allowance not applied. NI unchanged. If BR persists all year, annual over-tax ≈ £2,514 until HMRC refunds or adjusts code. Model BR vs normal: TaxBite BR mode.
Worked example: £50k with Plan 2 and 5% pension
Four deduction lines, one net — typical graduate payslip reality.
Common surprises — and what to do
Emergency tax on a new job
No P45, starter checklist delay, or HMRC not linking employments → BR or 0T. First payslip hurts; fix within weeks by chasing payroll and checking Personal Tax Account. Emergency tax guide.
BR on a second job — sometimes correct
If allowance is fully used on your main job, second job at BR may be annual-correct even if monthly feels harsh. Check allowance allocation across jobs on HMRC.
Bonus tax shock
A £5k bonus on £50k salary might show ~£2,100 tax in the bonus month (42% marginal on much of it). YTD balances out — unless you are on M1 month-1 code. Bonus tax guide.
Tax code changed mid-year
Underpaid tax from benefits-in-kind or previous error → K code. More tax each month until debt cleared. Not optional — payroll must apply HMRC’s instruction.
Scottish move
Relocate to Scotland → code may switch to S prefix. Same gross, different Income Tax. Scotland vs England.
£100k crossover
Cross £100,000 and allowance tapers — payslip tax jumps more than 40% alone would suggest. £100k taper guide.
Abbreviations cheat sheet
- EE — employee (your side of NI/pension)
- ER — employer (not deducted from you)
- TP — taxable pay
- NI No — National Insurance number (not the tax)
- Paye Ref — employer’s HMRC reference
- Period — e.g. Month 3 = June if tax year starts April
Payslip vs TaxBite — when numbers diverge
TaxBite models annual PAYE smoothly. Payslips wobble because of cumulative maths, mid-year joins, code changes, and penny rounding. Within £5–10/month on a stable £50k job with 1257L is normal. Persistent £200+/month gaps usually mean tax code, sacrifice setup, or extra deductions (cycle scheme, court orders) not in the calculator.
Official payslip guidance: gov.uk payroll payments.
Checklist when net pay looks wrong
- Read the tax code — not just the tax amount
- Compare YTD tax to YTD gross — is cumulative position sensible?
- Confirm gross matches contract (pro-rata, sacrifice)
- Run matching scenario in TaxBite
- Check Personal Tax Account for HMRC’s view
- Contact payroll with payslip + P60/P45 if code stuck wrong 6+ weeks
Model your payslip in TaxBite
Match your payslip →How take-home works → · Tax codes → · Emergency tax →
Estimates only — not tax advice. Payslip layouts and payroll rounding vary by employer. Always use your P60 and official HMRC records for year-end positions.