Payslips explained: make sure you’re getting paid enough, tax codes, pensions and more

Updated on 03 September 2019

We explain the key parts of your payslip and what to do if you’re not being paid enough.

Changes this year

Like tax codes, payslips are something we almost all have but few of us completely understand.

Yet understanding your payslip can stop you getting ripped off.

That could include an employer underpaying you, or the taxman or Student Loan Company taking more than their fair share.

Unfortunately, many people don’t get payslips at all, including one in six workers aged under 25 and one in 10 of those aged 25-34, according to a Government survey.

The Department for Business, Energy and Industrial Strategy (BEIS) also found a third of those who got a paycheque didn’t understand it, whilst many young workers did not realise they were entitled to National Minimum Wage.

This year has seen the Government tighten up rules on payslips, with 300,000 people getting one for the first time.

Payslips will also include more details to make it easier for workers to see if they’ve been underpaid.

Here’s how to read your payslip and what to do if you find something wrong.

Minimum wage 2019: how much is it, will I get it and is it rising?

You have a right to a payslip

Almost all permanent and casual employees have a right to a payslip every time they get paid.

The only exceptions are contractors, freelancers, those in the police service, merchant seamen and those working in share fishing.

Although there is no set template for payslips, they must include:

  • Gross pay – sometimes called basic pay – the money you earned before tax;
  • Take-home pay after tax and other deductions;
  • Deductions, such as income tax, pensions, student loan repayments and union dues.

New for 2019 is a requirement to show the number of hours worked on payslips where the pay varies by the amount of time worked.

Other optional information on payslips might include your tax code, which you should check to make sure you’re not overpaying, as well as your National Insurance number, payrate and additional payments such as overtime, tips or bonuses (these must also be included in the gross pay figure).

We've mocked up a payslip to give you an idea of what they look like. You'll see the new section on hours worked towards the bottom.

Please note that the details are made up and tax contributions are 'not to scale'.

Worried about losing your job? Compare income protection policies with Active Quote

A mocked up pay slip

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Are you getting paid enough?

When checking your pay, make sure you take the abovementioned deductions into account (more on those below).

If you still think there’s an error, talk to whoever is responsible for your company’s payroll, or, failing that, your boss.

Also make sure you’re being paid the National Minimum Wage or National Living Wage, which increased on 1 April.

You should be paid the money you’re owed straight away, not on the next payday. Don’t leave it longer than three months or you won't be able to take your employer to a tribunal.

If your employer disputes your claim, then give Acas (the Advisory, Conciliation and Arbitration Service) a call on 0300 123 1100.

Acas gives free, confidential and impartial advice.

They may be able to talk to your employer for you, involve other Government organisations or even advise you on taking your employer to a tribunal.

You can also get support from Citizens Advice.


When money is taken straight from your income, before the money reaches your bank account, it should appear as a deduction.

These should be clearly listed along with the amounts taken, as in our mock-up below:

Mocked-up pay slip with added annotations

The most common deductions are Income Tax, National Insurance, Pensions and Student Loan Repayments.

Note that pension contributions increased this month (April 2019) to 5% of your income.

You can opt-out of auto-enrolment pensions but you’d lose out on the extra 3% contribution from your employer, which is essentially free money.

You may also see deductions for things like Trade Union Subscriptions, Court Orders and Child Maintenance Services, potentially with added administration charges (maximum £1).

HMRC has also begun clawing back tax from gross pay in some instances.

With the exception of the above services, an employer is only allowed to make deductions with your written permission, or if they’ve overpaid you.

Even if you agree, deductions can’t reduce your wages below National Minimum Wage, unless they’re for the above payments or accommodation.

If you work in retail, an employer can’t take more than 10% of your pay – before deductions – to cover any shortfalls.

Keep your payslips

If you are emailed your payslip, consider printing them off and storing digital copies on your computer so you have two copies.

Not only are payslips important for challenging your employer, they affect your ability to borrow.

To apply for a mortgage, and some other types of loans, you’ll often be asked for several months’ worth of payslips, to prove your income and time in a job. Credit card applications are less likely to require payslips.

Just make sure you store payslips securely.

A criminal could use the information on your payslip to steal your identity.

Worried about losing your job? Compare income protection policies with Active Quote


To make things even more confusing, payslips tend to be filled with acronyms.

You can find a comprehensive list here, but we've listed the essential ones below.

PAYE – Pay As You Earn; indicates your employer is paying Income Tax directly to the Government

NIC – National Insurance Contributions, one of the deductions you’ll see

PP – Personal Pension, a deduction

SSP – Statutory Sick Pay, not to be confused with

SMP – Statutory Maternity Pay; for fathers look for SPP; Statutory Paternity Pay

To better understand your tax code, read our tax code guide.


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