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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

B

Basic RateTax
The 20% income tax rate covering taxable income between £12,571 and £50,270. Full definition
Blind Person's AllowanceTax
An extra £3,070 tax-free allowance for people registered as severely sight impaired. Full definition

C

Cumulative TaxTax
PAYE method that uses year-to-date totals so over- and underpayments self-correct. 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

E

Emergency TaxTax
A temporary tax code used when HMRC lacks information to issue the correct one. Full definition

F

Flat Rate ExpensesTax
A trade-specific tax-free allowance for uniforms and tools. Full definition

H

Higher RateTax
The 40% income tax band on taxable income between £50,271 and £125,140. 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

M

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

N

Non-Cumulative Tax (Week 1/Month 1)Tax
PAYE method that ignores year-to-date totals; flagged W1, M1, or X. Full definition

P

PAYE (Pay As You Earn)Tax
HMRC system that collects income tax and NI through your employer at source. Full definition
Personal AllowanceTax
The £12,570 of income each tax year that is free of income tax. Full definition

S

Scottish Income TaxTax
Six-band Scottish income tax regime, flagged by an S prefix on your tax code. 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

U

UnderpaymentTax
Unpaid tax from a prior year, usually recovered through next year's tax code. 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