What does every line on my UK payslip mean?

In plain English

Payslip layouts vary by provider, but the components are largely the same. The header identifies you and your employer and includes the tax code and NI category that drive deductions. The middle section lists earnings - contracted basic pay, plus any variable elements such as overtime, commission, bonuses or statutory pay. Below that come deductions, then a net pay figure.

Two important totals sit at the bottom: the period figures (this pay run) and the YTDfigures (year-to-date since 6 April). HMRC requires gross pay, taxable pay, tax paid, NI paid and pension contributions to appear, although exact wording differs.

Pension and salary-sacrifice arrangements complicate the picture. Under salary sacrifice, the apparent gross drops by the sacrificed amount before income tax and NI are calculated; under net pay, gross stays the same but taxable pay is reduced. Under relief at source, the deduction comes from net pay and tax relief is added inside the pension.

Student loan deductions are a separate calculation that operates per pay period rather than cumulatively. Based on HMRC guidance for 2026/27, the annual repayment thresholds are £26,065 for Plan 1, £28,470 for Plan 2, £32,745 for Plan 4, £25,000 for Plan 5 and £21,000 for the Postgraduate Loan. Income above the relevant threshold is deducted at 9% (6% for Postgraduate). Because the calculation is per period, a bonus month will produce a noticeably larger deduction than a steady month, even though the year-to-date position appears consistent with HMRC's intended outcome.

Income tax sits on top of all that. Based on HMRC publications for 2026/27, the personal allowance is £12,570, with 20% applied up to £50,270, 40% up to £125,140, and 45% above. National Insurance for category A employees is 8% between £12,570 and £50,270 and 2% above. The PAYE engine reads the tax code (for example 1257L), determines the cumulative allowance to date, and produces the period deduction. If the figures on your payslip do not appear to fit these thresholds, that may indicate a tax code mismatch or a pre-tax deduction you have not noticed; it does not prove an error in itself.

Every field, with example values (2026/27)

Worked example (2026/27 figures)

Sara earns £36,000 a year (£3,000/month basic) on code 1257L cumulative, NI category A, with a 5% net-pay pension. May gross is £3,000 + £250 overtime = £3,250. Pension £162.50 (5%) reduces taxable pay to £3,087.50. Cumulative tax to month two: total taxable pay £6,087.50; allowance to date £2,095; taxable above allowance £3,992.50; PAYE due ≈ £798.50; minus tax already paid in month one (~£390.50), giving roughly £408 this month. NI on £3,250 above £1,047.50 monthly threshold at 8% ≈ £176, plus a small adjustment for the upper band gives approximately £196. Net pay of about £2,423 appears consistent with these figures.

A second scenario - student loan added. James earns £42,000 a year (£3,500/month) on 1257L, NI category A, with a Plan 2 student loan. The Plan 2 monthly threshold is £28,470 ÷ 12 = £2,372.50. So his student loan deduction is (£3,500 − £2,372.50) × 9% ≈ £101.50 a month. Income tax is roughly (£3,500 − £1,047.50) × 20% = £490.50, NI is roughly (£3,500 − £1,047.50) × 8% = £196.20, and student loan adds £101.50, giving total deductions of about £788.20 and net pay around £2,711.80. If James also has a Postgraduate Loan, an additional 6% would apply above £21,000 ÷ 12 = £1,750, adding roughly (£3,500 − £1,750) × 6% = £105 a month - bringing net pay down further.

A third scenario - salary sacrifice. Kemi earns £55,000 a year (£4,583.33/month) and sacrifices 8% of salary into a pension, reducing her gross to £4,216.67. Income tax is then calculated on the lower gross - broadly this saves her 40% on the sacrificed amount, since her pay sits in the higher rate band above £50,270. NI is also calculated on the reduced gross, saving 2% on the sacrificed amount in this band. The payslip will show the lower gross and explicitly note the sacrificed amount. This appears consistent with HMRC's salary sacrifice guidance for 2026/27.

A fourth scenario - bonus month. Tom earns £40,000 a year and receives a £5,000 bonus in December. December gross is £3,333.33 + £5,000 = £8,333.33. Cumulative PAYE recalculates against year-to-date earnings, so the tax for that single month appears unusually high - partly because the bonus pushes his cumulative earnings above the higher rate threshold of £50,270, and partly because the cumulative engine catches up. NI on the bonus is added at 8% up to the Upper Earnings Limit. The result may look alarming but appears consistent with how PAYE handles bonuses; subsequent months self-correct as cumulative pay normalises.

Common mistakes people make

• Comparing gross and net but ignoring taxable pay, which excludes pension contributions.
• Reading YTD totals as monthly figures.
• Assuming the period number matches the calendar month - period 1 is April.
• Missing the difference between employer pension contributions (not deducted from your pay) and employee ones.
• Confusing the NI category with the tax code.
• Treating taxable pay as "net pay before tax" - taxable pay is gross minus pre-tax deductions only and is the figure PAYE applies to.
• Assuming overtime is taxed at a higher rate; it is taxed at your marginal rate, which may push earnings into a higher band that month but is not a separate higher rate.
• Believing salary sacrifice always saves money; it can affect mortgage affordability assessments and statutory pay calculations because the visible gross is lower.
• Missing the student loan plan letter - Plan 1, Plan 2, Plan 4, Plan 5 and Postgrad have different thresholds, and the wrong plan can produce noticeably different deductions.
• Not reading the description of "other deductions" lines carefully - some are voluntary and can be cancelled, others (like attachment of earnings) cannot.

When this might apply to you

1. You receive your first payslip and want to verify what every line means.
2. You changed pension scheme and noticed the taxable pay shifted.
3. You started overtime and want to confirm how it affects deductions.
4. You moved into a salary sacrifice arrangement and the gross looks lower.
5. You suspect a missing or wrong deduction line.
6. You started repaying a student loan and want to confirm the right plan letter is being used.
7. You received a bonus and want to understand why the deduction looks unusually large that month.
8. You moved between employers in the tax year and want to check the YTD figures carry across correctly.

What to do step by step

1. Confirm your tax code and NI category match your latest HMRC notice.
2. Check that gross pay = basic + variable elements (overtime, bonus, statutory pay).
3. Identify any pre-tax deductions (net-pay pension, salary sacrifice) and subtract from gross to find taxable pay.
4. Sense-check the income tax against your tax code and the 2026/27 thresholds (£12,570 / £50,270 / £125,140).
5. Sense-check the NI deduction against your NI category and the 2026/27 thresholds (8% to £50,270, 2% above).
6. Confirm the student loan deduction matches the relevant plan threshold and rate.
7. Compare period and YTD totals for internal consistency, especially after a bonus or pay change.
8. Keep at least the last six payslips and your latest P60 to reconcile any year-end queries.
9. Run our free payslip check to confirm the figures appear consistent with HMRC's PAYE rules.

When to contact HMRC, payroll, or a professional

Payroll is the right contact for missing or wrongly labelled lines. HMRC handles tax code and NI category changes. A tax adviser can help when complex deductions (share schemes, BIKs, salary sacrifice) make the payslip hard to verify.

Frequently asked questions

Related guides and tools

• Tax codes explained
• NI categories
• Pension auto-enrolment
• Take-home pay calculator
• Payslip decoder
• Run a free payslip check

Educational content only; not regulated tax advice.