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UK Payslip Glossary

Every term you might see on a UK payslip, explained in plain English. 97 entries, updated for the 2026/27 tax year.

A

Additional RateTax
The 45% income tax band applied above £125,140 in England, Wales and Northern Ireland. Full definition
Agency WorkerEmployment
A worker placed at a client by a recruitment agency, paid by the agency or an umbrella company. Full definition
Apprenticeship LevyCompliance
A 0.5% employer levy on pay bills above £3 million; never appears on employee payslips. Full definition
ArrearsEmployment
Back-pay owed from an earlier period and taxed when it is finally paid. Full definition
Attachment of EarningsDeduction
A court-ordered deduction from your pay to clear a debt. Full definition
Auto-EnrolmentPension
The legal duty on employers to enrol eligible staff into a workplace pension. Full definition
Attachment of Earnings OrderDeduction
A court order that compels your employer to deduct a fixed sum from your wages to clear a civil debt. Full definition
Apprenticeship Levy AllowanceCompliance
The £15,000 annual offset every employer can claim against the 0.5% Apprenticeship Levy, eliminating the levy for pay bills under £3 million. Full definition

B

Basic RateTax
The 20% income tax rate covering taxable income between £12,571 and £50,270. Full definition
Benefits in Kind (BIK)Benefit
Taxable non-cash perks like a company car, medical insurance, or a beneficial loan. Full definition
Blind Person's AllowanceTax
An extra £3,070 tax-free allowance for people registered as severely sight impaired. Full definition
BonusEmployment
An extra payment fully taxed and NI-charged in the period it is paid. Full definition

C

Child Maintenance DeductionDeduction
A pay deduction ordered by the Child Maintenance Service. Full definition
Childcare VouchersBenefit
A closed salary sacrifice scheme that swaps salary for tax-free childcare vouchers. Full definition
CommissionEmployment
Performance-linked pay treated as ordinary earnings for PAYE and NI. Full definition
Company Car TaxBenefit
Income tax on the private use of a company car, scaled by list price and CO2. Full definition
Cumulative TaxTax
PAYE method that uses year-to-date totals so over- and underpayments self-correct. Full definition
Cycle to Work SchemeBenefit
A salary sacrifice for a bike and safety kit, repaid from gross pay over 12-18 months. Full definition
CSA Deduction (Child Support)Deduction
A historical Child Support Agency deduction from earnings used to fund maintenance payments - now branded as a Deduction from Earnings Order under the Child Maintenance Service. Full definition
Company Share Option Plan (CSOP)Share Scheme
A discretionary tax-advantaged option scheme for companies that are too large for EMI, with a £60,000 per-employee limit. Full definition
Class 1A NICNational Insurance
An employer-only NI charge on most taxable benefits in kind, paid annually with the P11D(b) at 15% for 2026/27. Full definition
Cumulative Tax CalculationTax
The PAYE method that recalculates your tax position from 6 April every pay period so that any over- or under-payment self-corrects. Full definition · Read the full guide

D

DeductionsDeduction
Any amount subtracted from gross pay, statutory or voluntary. Full definition
Direct Earnings AttachmentDeduction
A DWP-issued order that lets the department recover overpaid benefits straight from your wages, without going through a court. Full definition

E

Emergency TaxTax
A temporary tax code used when HMRC lacks information to issue the correct one. Full definition
Employee Number / Payroll NumberIdentifier
An internal payroll ID assigned by your employer. Full definition
Employer NINational Insurance
Employer-side NI of 15% on pay above £5,000; doesn't reduce take-home pay. Full definition
Employer Payment Summary (EPS)Compliance
Monthly RTI report employers send HMRC to claim reductions and reliefs. Full definition
Enterprise Management Incentive (EMI)Share Scheme
A discretionary share-option scheme aimed at smaller, growing companies, offering generous tax breaks on options worth up to £250,000 per employee. Full definition
Earlier Year Update (EYU)Compliance
A historical RTI submission used to correct a closed tax year - replaced from 2020/21 onwards by year-end FPS amendments. Full definition
Employment AllowanceNational Insurance
A £10,500 annual reduction to small employers' Class 1 secondary NIC bill from April 2025. Full definition

F

Flat Rate ExpensesTax
A trade-specific tax-free allowance for uniforms and tools. Full definition
Full Payment Submission (FPS)Compliance
The RTI return sent on or before each pay day with employee pay and deductions. Full definition

G

Gross PayEmployment
Total earnings before any tax, NI, or other deduction is taken. Full definition

H

Higher RateTax
The 40% income tax band on taxable income between £50,271 and £125,140. Full definition
Holiday PayEmployment
Pay received while on annual leave, at your normal rate. Full definition

I

IR35Compliance
Off-payroll rules that treat 'disguised employees' as employees for tax. Full definition

K

K CodeTax
A tax code where untaxed income exceeds your allowance, adding to taxable pay. Full definition
K Code AdjustmentTax
The mechanism by which a K-prefix tax code adds untaxed income to your taxable pay each pay period. Full definition

L

Lieu Days / TOILEmployment
Time Off In Lieu - paid time off given instead of overtime pay. Full definition
Lower Earnings Limit (LEL)National Insurance
The earnings floor at which employees start to build up qualifying years for the State Pension, even though no NI is yet payable. Full definition

M

Marriage AllowanceTax
Transfer £1,260 of unused personal allowance to a spouse, saving up to £252. Full definition

N

National Insurance (NI)National Insurance
Mandatory contributions funding the State Pension and other state benefits. Full definition
National Living Wage (NLW)Employment
The legal minimum hourly rate for workers aged 21+, £12.21 for 2026/27. Full definition
National Minimum Wage (NMW)Employment
Age-banded legal minimum hourly rates for workers under 21 and apprentices. Full definition
Net PayEmployment
The take-home figure paid into your bank account after all deductions. Full definition
NI Category LetterNational Insurance
The single-letter code that sets your NI rate (A, B, C, H, M, V, Z and others). Full definition
NI Number (NINO)Identifier
A lifetime ID (e.g. AB 12 34 56 C) that links you to HMRC and DWP records. Full definition
Non-Cumulative Tax (Week 1/Month 1)Tax
PAYE method that ignores year-to-date totals; flagged W1, M1, or X. Full definition
Notice PayTermination
Pay during notice or in lieu of notice, fully taxed and NI-charged. Full definition
Notional PayBenefit
A non-cash amount that is treated as taxable pay for PAYE and NI purposes even though no money changes hands. Full definition

O

OvertimeEmployment
Hours worked above contracted hours, often paid at a premium rate. Full definition
Optional Remuneration Arrangements (OpRA)Benefit
Anti-avoidance rules that strip the income-tax and NI savings out of most salary-sacrifice benefits taken in exchange for cash pay. Full definition

P

P11DCompliance
Annual employer form reporting per-employee benefits in kind to HMRC. Full definition
P45Compliance
The leaver document showing year-to-date pay and tax for your next employer. Full definition
P60Compliance
Year-end summary of pay and deductions, issued by 31 May. Full definition
Pay PeriodEmployment
The interval - weekly, fortnightly, four-weekly or monthly - covered by one payslip. Full definition
PAYE (Pay As You Earn)Tax
HMRC system that collects income tax and NI through your employer at source. Full definition
Pension ContributionPension
Pay diverted into a workplace pension; minimum 5% of qualifying earnings. Full definition
Personal AllowanceTax
The £12,570 of income each tax year that is free of income tax. Full definition
P11D(b)Compliance
The employer's annual return that reports the total Class 1A NIC due on benefits in kind, alongside the per-employee P11Ds. Full definition
PAYE Settlement Agreement (PSA)Compliance
An optional agreement letting an employer settle the income tax and NIC on minor, irregular or impracticable benefits in a single annual payment. Full definition
Pensionable PayPension
The slice of pay your employer uses to calculate pension contributions; defined by the scheme rules and often broader or narrower than qualifying earnings. Full definition
Primary Threshold (PT)National Insurance
The earnings level at which an employee starts paying Class 1 NIC; £242 per week for 2026/27. Full definition
P45 Starter DeclarationCompliance
The choice between Statements A, B and C that a new starter ticks when they don't have a P45, determining the initial tax code. Full definition
Postgraduate Loan (PGL)Deduction
A separate student-loan plan for Master's and Doctoral study, repaid at 6% on income above £21,000 a year. Full definition
Plan 5 Student LoanDeduction
The newest English undergraduate loan plan for courses starting on or after 1 August 2023, repaid at 9% on income above £25,000. Full definition
Post-Employment Notice Pay (PENP)Termination
A statutory calculation that strips the value of any unworked notice out of a termination package and taxes it as ordinary earnings. Full definition

Q

Qualifying EarningsPension
The £6,240-£50,270 earnings band used for auto-enrolment minimums. Full definition

R

Real Time Information (RTI)Compliance
Per-payday reporting from employers to HMRC; replaced annual P14/P35 returns. Full definition
Redundancy PayTermination
Compensation for job loss; first £30,000 is income-tax free. Full definition

S

Salary SacrificeBenefit
Swap gross salary for a non-cash benefit, cutting tax and NI. Full definition
Scottish Income TaxTax
Six-band Scottish income tax regime, flagged by an S prefix on your tax code. Full definition
Self-AssessmentCompliance
Annual HMRC return for income not collected through PAYE. Full definition
Shared Parental Pay (ShPP)Statutory Pay
Statutory pay shared by parents after birth or adoption. Full definition
Statutory Adoption Pay (SAP)Statutory Pay
Adoption-leave statutory pay mirroring SMP structure. Full definition
Statutory Maternity Pay (SMP)Statutory Pay
39 weeks of statutory pay during maternity leave. Full definition
Statutory Paternity Pay (SPP)Statutory Pay
Up to 2 weeks of statutory pay during paternity leave. Full definition
Statutory Sick Pay (SSP)Statutory Pay
Employer-paid sick pay of £118.75/week for up to 28 weeks. Full definition
Student Loan DeductionDeduction
Plan-specific repayment deducted from pay above the relevant threshold. Full definition
Save As You Earn (SAYE)Share Scheme
A tax-advantaged HMRC share scheme that lets employees save monthly to buy company shares at a discount of up to 20%. Full definition
Share Incentive Plan (SIP)Share Scheme
A tax-advantaged scheme allowing employees to acquire shares in their employer through four routes - Free, Partnership, Matching and Dividend shares. Full definition
Settlement PaymentTermination
A negotiated, lump-sum payment made on or after the termination of employment in exchange for the employee waiving their statutory and contractual claims. Full definition
Secondary Threshold (ST)National Insurance
The earnings level at which an employer starts paying employer's NIC; £5,000 per year for 2026/27. Full definition

T

Tax CodeTax
HMRC code (e.g. 1257L) telling your employer how much tax-free pay to apply. Full definition
Tax PeriodTax
Numbered PAYE period within the tax year (April = 1). Full definition
Tax RefundTax
Money HMRC returns when you have overpaid income tax. Full definition
Tax-Free AllowanceTax
Total tax-free income for the year, usually £12,570 plus adjustments. Full definition
Taxable PayTax
Gross pay minus tax-free allowances; the figure income tax is charged on. Full definition
TUPE TransferEmployment
Rules that protect employees' jobs and terms when their employer changes through a business transfer or service provision change. Full definition
Termination Payment (£30,000 threshold)Termination
A payment made because employment is ending; the first £30,000 of genuine compensation is income-tax free, the excess is taxed. Full definition

U

Umbrella CompanyEmployment
A payroll intermediary that employs contractors and runs PAYE for them. Full definition
UnderpaymentTax
Unpaid tax from a prior year, usually recovered through next year's tax code. Full definition
Upper Earnings Limit (UEL)National Insurance
The earnings ceiling above which employee NI drops from the main rate (8%) to the additional rate (2%); £967 per week for 2026/27. Full definition

W

Week 1 / Month 1 BasisTax
A non-cumulative PAYE basis that ignores year-to-date totals, treating every pay period in isolation. Full definition · Read the full guide

Y

YTD (Year to Date)Employment
Running totals since 6 April for pay, tax, NI and other items. Full definition

Z

Zero-Hours ContractEmployment
A contract with no guaranteed hours but full holiday and minimum wage rights. Full definition