How to read your payslip: every line explained, with an example

How to read your payslip: the four blocks on every UK payslip

A UK payslip has four blocks: who and when (your name, payroll number, National Insurance number, tax code and tax period), payments (salary, overtime, sick pay), deductions (Income Tax, National Insurance, pension, student loan and anything else), and totals (net pay for this period plus year-to-date figures since 6 April).

Read it top to bottom in this order:

1. Check the tax period and pay date. Month 1 is April and Month 6 is September for monthly pay; Week 1 starts on 6 April for weekly pay.
2. Check your tax code. According to GOV.UK, 1257L is the code used for most people with one job or pension in the 2026 to 2027 tax year. Anything else has a reason, and HMRC should have sent you a notice explaining it.
3. Check gross pay against your contract: annual salary divided by 12 for monthly pay, or hours multiplied by your rate.
4. Check each deduction against the figures in the next section.
5. Check the year-to-date totals, which should rise by exactly this period's figures.

To check your own figures line by line, enter your salary, pension percentage, student loan plan and tax code in the UK take-home pay calculator. It uses the same engine as every figure in this guide.

An annotated example payslip for £32,000 in September 2026

This example payslip is for an employee in England on a £32,000 salary, paid monthly on 25 September 2026 (Month 6 of the 2026 to 2027 tax year), with tax code 1257L, NI category letter A, a 5% pension under a net pay arrangement and a Plan 2 student loan. We worked out every figure with RightSums's UK salary engine; the year-to-date column is six months of the same pay.

Real payroll software rounds some lines by period, so your payslip can differ by a few pence or pounds from an annual calculation. According to HMRC's 2026 to 2027 student loan deduction tables, the Plan 2 monthly threshold is £2,448.75 and the deduction is rounded down to the nearest whole pound, so this payslip would show £19 rather than £19.61. GOV.UK gives the monthly NI threshold as £1,048, which gives £129.49 rather than £129.53.

A payslip with overtime, a bonus or salary sacrifice adds lines to the payments block. A car or private medical cover may appear as a notional "benefit in kind" line if your employer payrolls benefits: according to GOV.UK, payrolling becomes mandatory for company cars, fuel, vans and medical benefits from 6 April 2027 and for most other benefits from April 2028. Until then, many employers still report benefits on a P11D and HMRC collects the tax through your tax code instead.

Income Tax and your tax code: the line that changes most often

Income Tax on your payslip is worked out from your tax code, which tells your employer how much of your pay is tax-free. According to GOV.UK, the number is your tax-free income for the year divided by 10, and the letter says how it was worked out.

• L: the standard Personal Allowance.
• M or N: you have received, or given away, 10% of a partner's Personal Allowance under Marriage Allowance.
• BR, D0, D1: all pay from this job is taxed at 20%, 40% or 45%, usually for a second job.
• 0T: no tax-free pay, often used when a new employer has no details from your last job.
• K: you have untaxed income or benefits bigger than your allowance, so extra pay is taxed.
• S or C: Scottish or Welsh rates.
• W1, M1 or X after the code: an emergency, non-cumulative basis, where each pay period is taxed on its own.

If the code on your payslip is not what you expected, the tax code checker decodes it and shows the tax it should produce. Our guides on the emergency tax code and on what to do when your tax code is wrong cover how to get it fixed and your overpaid tax back.

National Insurance and your category letter

Employee National Insurance in the 2026 to 2027 tax year is 8% of pay between £1,048 and £4,189 a month and 2% above £4,189, according to GOV.UK. It is worked out on each pay period on its own, not cumulatively like Income Tax, so a big month does not get the unused threshold from quiet months.

Your category letter decides which rates apply. According to GOV.UK, the main letters are:

• A: most employees.
• B: married women and widows with a valid election to pay reduced NI.
• C: employees over State Pension age. According to GOV.UK, employees stop paying Class 1 NI when they reach State Pension age.
• H: apprentices under 25; M: employees under 21.
• J and Z: employees who can defer NI because they already pay it in another job.
• V: veterans in their first civilian job since leaving the armed forces.
• X: employees who do not pay NI, for example because they are under 16.

If you are over State Pension age and still see letter A with NI deducted, show your employer proof of your age and ask for the letter to be changed to C.

Pension on your payslip: net pay arrangement or relief at source

Your pension line looks different depending on how your scheme gives tax relief, but a 5% contribution leaves the same take-home pay for a basic rate taxpayer either way. According to HMRC's Pensions Tax Manual (PTM044230), under a net pay arrangement the employer takes the contribution from gross pay and then works out PAYE on the rest. Under relief at source (PTM044220), you pay 80% and the pension provider claims the other 20% from HMRC.

In all three rows £133.33 a month goes into the pension pot. Relief at source shows a smaller pension line and a larger tax line because the tax relief arrives in the pot, not on your payslip. Salary sacrifice cuts your contractual pay, so according to GOV.UK only the reduced salary is subject to tax and NI, and HMRC's student loan manual (CSLM17055) ties student loan deductions to pay that is liable to Class 1 NI, so the sacrificed pay is out of both. That is why it leaves £22.67 a month more. Our guide on whether salary sacrifice is worth it covers the trade-offs.

The legal minimum under automatic enrolment is 5% from you and 3% from your employer, 8% in total, on qualifying earnings between £6,240 and £50,270 a year, according to GOV.UK. Many employers use your whole salary instead, as this example does.

Student loan deductions for Plans 1, 2, 4, 5 and the postgraduate loan

Student loan deductions on a payslip are 9% of pay above your plan's threshold, or 6% above £21,000 for a Postgraduate Loan, according to GOV.UK's thresholds for the 2026 to 2027 tax year. Plan 5, for undergraduate courses in England starting on or after 1 August 2023, has its first repayments in this tax year. The deduction is worked out on each pay period on its own, so one month of overtime can trigger a deduction even if your yearly pay is below the threshold.

If you have a Postgraduate Loan and an undergraduate plan, both deductions appear as separate lines. If deductions continue after you think you have repaid your loan, contact the Student Loans Company with your payslips.

Why is my take-home pay so low this month?

Take-home pay usually drops because one deduction changed: your tax code, an underpayment being collected, a higher pension rate, a student loan threshold, overtime taxed in the month, or sick pay replacing salary. Compare this payslip with last month's line by line and the change will sit in one row. The table below shows each cause on the £32,000 example, worked out with RightSums's engine.

A new or emergency tax code

A new job, a second job or a new benefit such as a company car can change your code. An emergency code like 0T or 1257L M1 is common in the first weeks of a job and usually corrects itself once HMRC gets your details.

An underpayment being collected

According to GOV.UK, if you owe less than £3,000 and pay tax through PAYE, HMRC usually collects it by changing your tax code, in equal amounts over 12 months from the start of the next tax year. Collecting £600 means taking £3,000 off your tax-free pay, which costs £50 a month at 20%.

A pension increase

Being automatically enrolled after a postponement, or your employer raising the scheme rate, adds a new or bigger pension line. Moving from 5% to 8% costs £64 a month on £32,000 under net pay.

Student loan thresholds and overtime

Every £1 of overtime at this salary loses 20% tax, 8% NI, 9% student loan and 5% pension, with the pension earning back 1% in tax relief. Of £600 you keep £354. With a cumulative code, a one-off bonus is only taxed at 40% if your pay so far this tax year passes the higher rate point for the year to date; on an M1 or W1 code, any month over £4,189.17 of taxable pay pays 40% on the excess. Our guide to what a pay rise does to take-home pay covers regular increases.

Sick pay

According to GOV.UK, Statutory Sick Pay is £123.25 a week or 80% of your normal weekly earnings, whichever is lower, for up to 28 weeks, and tax and NI are deducted from it. If your employer pays only SSP, a sick week on £32,000 pays £123.25 instead of about £615 of salary. The Statutory Sick Pay calculator works out your own amount.

Why your P60 shows less than your salary

Your P60 shows the pay that Income Tax was worked out on, so it is lower than your salary when a pension is taken under a net pay arrangement or through salary sacrifice. On the £32,000 example with a 5% pension, the P60 pay figure would be £30,400 for a full year, not £32,000.

• Net pay arrangement: the £1,600 pension is taken before PAYE, according to PTM044230, so taxable pay is £30,400.
• Salary sacrifice: your contractual pay falls to £30,400, and according to GOV.UK only the reduced salary is subject to tax and NI.
• Relief at source: the pension comes out of taxed pay, so the P60 shows the full £32,000.

Other reasons are a start date after 6 April, unpaid leave, pay paid by a previous employer (which appears on your P45 instead), and cycle-to-work or other sacrifice schemes. According to GOV.UK, your employer must give you a P60 by 31 May if you were working for them on 5 April, and you get one for each job. The year-to-date taxable pay on your March payslip should match it.

Your legal right to an itemised payslip

Every employee and worker in Great Britain has a legal right to an itemised payslip on or before each payday, under section 8 of the Employment Rights Act 1996. According to GOV.UK, the payslip must show:

• your earnings before and after deductions;
• the amount of any deductions that may change each time you are paid, such as tax and NI;
• the number of hours you worked, if your pay varies with the time you work.

Fixed deductions, such as a season ticket loan, can be shown as a total if your employer gives you a separate written statement of them before your first payslip and updates it every year. Where you are paid by more than one method, section 8 requires the amount and method of each part payment.

The hours rule matters most for zero-hours, shift and hourly-paid staff: section 8 says the hours can be shown as one total or split by type of work or rate of pay. The law does not require your hourly rate, holiday balance, NI number or tax code, although most payslips show them. Payslips can be printed or electronic, according to GOV.UK, so an emailed or portal payslip is valid, and section 8 does not require a signature or stamp. Contractors, freelancers, the police service and some share fishermen and merchant seamen are outside the rule.

If your employer does not give you payslips, ask in writing first. Under section 11 of the Employment Rights Act 1996, you can then ask an employment tribunal to decide what the payslip should have included.

How long to keep your payslips

Keep your payslips at least until you have checked them against your P60 each year, and for at least 22 months after the end of the tax year if you send a Self Assessment tax return on time, according to GOV.UK. For a 2025 to 2026 return sent by 31 January 2027, that means keeping records until at least 31 January 2028. If you file late, keep them for at least 15 months after the date you sent the return.

GOV.UK describes payslips as proof of your earnings, tax paid and pension contributions, which is why landlords, lenders and benefit claims ask for them. Keep a PDF of every payslip before you leave a job, because you may lose access to your employer's portal on your last day.

Your next step: take your latest payslip, enter the salary, tax code, pension method and loan plan in the take-home pay calculator, and compare each line. If only the tax line is out, check the code with the tax code checker. To see a full breakdown for your exact salary, pick it from the salary after tax pages.