UK Payslip Explained: What Every Line on Your Pay Slip Means (2025/26)

A UK payslip looks cryptic the first time you see one. A single page carries a tax code, a National Insurance letter, two or three deduction lines and a figure at the bottom that is smaller than the salary you agreed to. Every line has a purpose, and once you know what each one does you can check your pay in about two minutes.

What Every UK Payslip Must Show

By law a payslip has to state your gross pay and every deduction, so that the amount you receive can be traced back. A compliant payslip includes:

• The employer's name
• The pay period it covers (week, month or four-weekly)
• Gross pay for the period and for the tax year to date
• Each deduction, with the amount taken
• Net pay, the figure that reaches your bank account
• Your tax code and National Insurance number
• Your National Insurance category letter

If any of those are missing, ask payroll for a corrected payslip. You are entitled to one.

Gross Pay vs Net Pay

Gross pay is what you earn before anything is taken off. Net pay, often called take-home pay, is what is left after income tax, National Insurance and any other deductions. The gap between the two is usually somewhere between 15% and 32% of gross pay for a UK employee, depending on salary.

For a salary of £35,000 with no pension or student loan, gross pay is £2,916.67 a month and net pay is about £2,393.30. The difference is income tax and National Insurance, nothing else.

PAYE Income Tax and Tax Codes

Pay As You Earn (PAYE) spreads your income tax evenly across the year instead of handing you a bill in January. Your employer works out the tax on each payment using HMRC's tax tables and your tax code.

The code is a compressed version of your tax-free allowance. 1257L means £12,570 of income is tax free, which is the standard personal allowance for 2025/26. Numbers lower than that mean something is reducing your allowance, such as untaxed income from a second job or a benefit in kind. Codes beginning with K mean the opposite: you have income that HMRC collects through your pay because your allowance is not enough to cover it.

If your code looks wrong, the quickest fix is the HMRC app or your personal tax account. A wrong code usually corrects itself over a few months, but you can also be owed a refund.

National Insurance

National Insurance (NI) is a separate deduction from income tax, and it pays for the State Pension and public services rather than general taxation. As an employee you pay Class 1 contributions:

• 8% on earnings between £12,570 and £50,270 a year
• 2% on earnings above £50,270

Your payslip shows the category letter, usually A for standard employees. Other letters cover married women with a reduced rate, apprentices and directors. The full breakdown, including thresholds and employer contributions, is in our National Insurance guide.

Pension Contributions

If you are enrolled in a workplace pension, the minimum automatic enrolment contribution is 8% of qualifying earnings, made up of at least 3% from your employer and the rest from you. Qualifying earnings are the slice between £6,240 and £50,270 a year.

Two things are worth checking on the payslip:

• Whether your contribution is taken before tax (net pay arrangement, so you get tax relief immediately) or after tax (relief at source, where the pension provider claims basic-rate relief back).
• Whether your employer is paying their share on your full salary or only on qualifying earnings. Many do the minimum, but some are more generous.

Higher-rate taxpayers who use relief at source have to claim the extra 20% or 25% through Self Assessment. It is not automatic.

Student Loan Repayments

Student loan repayments are deducted through PAYE once your income passes the threshold for your plan. The rate is 9% of income above the threshold, or 6% for postgraduate loans.

Plan	2025/26 threshold	Rate
Plan 1	£26,065	9%
Plan 2	£28,470	9%
Plan 4 (Scotland)	£32,745	9%
Plan 5	£25,000	9%
Postgraduate	£21,000	6%

If you have more than one loan, tell HMRC through your student loan account. Otherwise the deduction can be split wrongly and you may repay more than you owe.

Other Deductions You Might See

• Cycle to Work scheme hire payments
• Childcare vouchers or tax-free childcare adjustments
• Season ticket loans and travel advances
• Union subscriptions paid through payroll
• Charitable giving through Gift Aid payroll giving
• Salary sacrifice for a car, pension or bike, which reduces gross pay before tax

Salary sacrifice lowers your gross pay, which reduces income tax and National Insurance, but it also lowers the salary used for mortgage applications and some benefits. It is a real trade-off, not free money.

Worked Example: £35,000 a Year

Line	Monthly
Gross pay	£2,916.67
PAYE income tax	£373.83
National Insurance	£149.53
Pension (5% employee)	£145.83
Net pay before student loan	£2,247.48

Add a Plan 2 student loan and the deduction is about £49 a month on this salary ((35,000 - 28,470) x 9% / 12).

Use the free UK Income Tax Calculator and National Insurance Calculator to get your own figures to the penny before you compare them against a payslip.

Four Checks Worth Doing

1. Gross pay matches your contract. A pro-rata month for a mid-month start is normal; a full month at the wrong rate is not.
2. The tax code is the one HMRC shows. A stale code from a previous job is the most common cause of overpaid tax.
3. NI is charged at 8%, not 12%. The main rate fell to 8% in April 2024, so an old payroll system or a mis-set rate stands out.
4. Year-to-date figures add up. Multiply a monthly deduction by the month number and compare it with the YTD column.

All the UK Calculators in One Place

The UK Tax Calculators hub collects income tax, National Insurance and VAT in one page. For the wider picture, our UK income tax guide explains the personal allowance taper, and the take-home pay examples show what common salaries actually pay after tax.