Understanding PAYE on Your UK Payslip (2026/27)

PAYE (Pay As You Earn) is the UK system that collects income tax and National Insurance from your wages before your employer pays you. The figure you see beside "PAYE" or "Tax" on your payslip is the income tax HMRC has already collected for that pay period. This guide walks through how that figure is built, how the personal allowance is split across pay periods, and what to do if the number on your payslip looks wrong.

How PAYE works in plain English

Every employer in the UK is responsible for working out how much income tax to deduct each time they pay you. They do this by taking three inputs and feeding them into HMRC's PAYE rules.

1. Your gross pay for the period (basic, overtime, bonus, commission, taxable benefits).
2. Your tax code, which tells the employer how much of your annual income is tax-free and which rules to apply.
3. The pay frequency, which decides how the annual allowance and bands are sliced across the year.

The output is the amount of income tax to deduct. National Insurance is a separate calculation, but it sits alongside PAYE on most payslips.

The personal allowance and how it is split

For 2026/27, the standard personal allowance remains GBP 12,570 per year. That is the amount you can earn before paying any income tax. But you do not receive the full allowance in one go in April. Instead, HMRC splits it across the pay periods.

If you are paid monthly, you get 1/12 of your allowance each month: GBP 1,047.50.

If you are paid weekly, you get 1/52 each week: GBP 241.73.

If you are paid four-weekly, you get 4/52 each pay period: GBP 966.92.

The income tax bands are split in the same way. The basic rate band of GBP 37,700 becomes GBP 3,141.67 a month or GBP 725.00 a week. PAYE works through these slices each pay period to decide how much tax to take.

Cumulative versus non-cumulative tax codes

PAYE comes in two flavours, and the difference matters when your pay changes during the year.

A cumulative tax code (most codes such as 1257L) tells the employer to add up all your earnings since 6 April and all the tax-free allowance you have built up since 6 April. The tax due on your year-to-date earnings is recalculated each pay day, and the tax already paid is subtracted. This evens out spikes: if you earn nothing in May then a bonus in June, the unused May allowance carries forward and reduces the June tax bill.

A non-cumulative code (with the suffix W1, M1, or X) tells the employer to ignore the year-to-date totals and treat each pay period in isolation. You get exactly 1/52 or 1/12 of the allowance, no more, no less. Non-cumulative codes are common for new starters, second jobs, and anyone HMRC needs to put on emergency tax until the right code is issued.

If you switch from non-cumulative to cumulative mid-year, the next payslip often shows a refund as the year-to-date numbers catch up.

Worked example: monthly pay

Say you earn GBP 36,000 a year on tax code 1257L (cumulative), paid monthly.

• Gross pay each month: GBP 3,000.
• Monthly allowance: GBP 1,047.50.
• Taxable pay each month: GBP 1,952.50.
• Basic-rate tax (20 percent): GBP 390.50.

Your payslip should show PAYE of about GBP 390.50 every month. If a bonus of GBP 1,000 lands in month 6, that month's gross is GBP 4,000, taxable pay rises to GBP 2,952.50, and PAYE rises to about GBP 590.50 for that month. The cumulative code keeps the rest of the year on track.

Worked example: weekly pay

Say you earn GBP 600 a week on tax code 1257L (cumulative).

• Weekly allowance: GBP 241.73.
• Taxable pay each week: GBP 358.27.
• Basic-rate tax (20 percent): GBP 71.65.

If you take an unpaid week off, the cumulative code rolls the unused allowance into the next pay packet, so the following week's PAYE will be lower than usual.

What to do if the PAYE on your payslip looks wrong

PAYE errors are not rare. The most common causes are an outdated tax code, a non-cumulative code that should have been switched to cumulative, untaxed benefits being added late in the year, or a payroll mis-key.

Run through these checks first.

1. Confirm your tax code matches the one on your latest HMRC notice (P2 coding notice or your Personal Tax Account at gov.uk).
2. Compare your year-to-date gross and tax to the year-to-date numbers on a take-home calculator using the same tax code and pay frequency.
3. Look for the W1, M1, or X suffix. If you have been on the same job for several months and still see a non-cumulative code, contact HMRC.
4. Check whether benefits in kind (company car, medical insurance) have been added through your tax code rather than payrolled. A sudden drop in your code number is the giveaway.

If the numbers do not match, your employer's payroll team can investigate, and HMRC can reissue a corrected tax code. Refunds for over-deducted PAYE usually appear automatically once a cumulative code is in force.

For a deeper read on tax codes, see our tax code checker. If you suspect an error and want a checklist of what to do next, our guide on why your pay looks wrong walks through every step.

Quick reference

• PAYE is income tax collected on each pay packet, set by your tax code and pay frequency.
• Cumulative codes balance the year automatically; non-cumulative codes (W1, M1, X) treat each period in isolation.
• Personal allowance and tax bands are sliced into 12 monthly or 52 weekly chunks.
• A bonus, missed period, or new starter status will visibly change the PAYE line on your payslip.
• If something looks off, check your code, compare year-to-date totals, and ask payroll or HMRC to correct it.