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
- 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
- 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
- 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