How PayslipIQ checks UK payslips

1. Supported tax years

PayslipIQ currently models the following UK tax years end-to-end:

• 2024/25 - for retrospective payslip checks and P60 reconciliation.
• 2025/26 - for retrospective payslip checks and P60 reconciliation.
• 2026/27 - current tax year, used by default unless the payslip pay date falls in a previous year.

Older tax years (pre-2024/25) are out of scope. If you upload a payslip from before April 2024, the explanation will note that the band figures used are not the ones HMRC would have applied at the time and you should contact payroll or HMRC for an authoritative view.

2. Supported UK regions

PayslipIQ models the four UK income-tax regimes:

• England - rUK bands (basic 20% / higher 40% / additional 45%).
• Wales - Welsh rates of income tax, currently aligned with rUK; tax codes prefixed C.
• Northern Ireland - rUK bands.
• Scotland - separate Scottish rate bands (starter 19% / basic 20% / intermediate 21% / higher 42% / advanced 45% / top 48%); tax codes prefixed S.

Region is inferred from the tax code prefix (S, C) on the payslip you supply. If the prefix is missing or ambiguous we default to rUK and flag this in the explanation.

3. Supported tax codes

We recognise the standard UK tax-code grammar: numeric allowance + suffix or prefix letter, plus the M1/W1/X non-cumulative markers. Specifically:

• L - standard personal allowance (e.g. 1257L).
• M / N - marriage allowance transferred to / from spouse.
• T - items reviewed manually by HMRC.
• BR - all income at basic rate, no personal allowance (typical second job).
• 0T - no personal allowance, taxed across the bands.
• D0 / D1 - all income at higher (40%) / additional (45%) rate.
• K - negative allowance prefix (untaxed income exceeds your allowance).
• S / C - Scottish or Welsh rates apply.
• NT - no tax to be deducted.
• M1 / W1 / X - non-cumulative; calculated for the period only.

Codes outside this set (e.g. obsolete or scheme-specific codes) are accepted but flagged with a "manual verification recommended" notice in the explanation.

4. HMRC threshold sources

PayslipIQ uses public HMRC publications as the source of truth for every numeric threshold and rate it applies. The primary references are:

• gov.uk - Income Tax rates and Personal Allowances.
• gov.uk - National Insurance rates and categories.
• gov.uk - Tax codes: letters and what they mean.
• gov.uk - Repaying your student loan (Plans 1, 2, 4, 5 and Postgraduate).
• gov.uk - Workplace pensions: automatic enrolment qualifying earnings band.
• Revenue Scotland - Scottish Income Tax bands.
• Welsh Government - Welsh Rates of Income Tax.

Where HMRC publishes a threshold change mid-year, our calculator applies the rate effective on the user-supplied pay date. The explanation cites the rule version used so the figures are auditable.

5. Pension limitations

PayslipIQ identifies the most likely pension scheme type from the way the contribution appears on the payslip - net-pay, relief-at-source or salary sacrifice - and explains its effect on taxable pay and NIable pay. We do not:

• Calculate annual allowance carry-forward across multiple jobs or schemes.
• Calculate tapered annual allowance for high earners.
• Model defined-benefit pension input amounts.
• Forecast retirement income or transfer values.
• Advise on contribution rate changes - that is regulated pension advice.

For any decision touching on annual allowance, tapering, transfers or scheme changes, speak to your scheme administrator and a pensions adviser.

6. Student loan limitations

We sanity-check student loan deductions against the Plan 1, 2, 4, 5 and Postgraduate Loan thresholds and rates published by gov.uk. The known limitations are:

• We rely on you (or the payslip) to identify the plan. If the wrong plan is being deducted we will flag it as worth checking; the Student Loans Company is the authoritative source.
• We do not project payoff dates or interest accrual.
• We do not handle plan migrations mid-year (e.g. moving from Plan 2 to Plan 5).
• For overseas income or non-UK earnings, the calculation does not apply.

7. Salary sacrifice limitations

Salary sacrifice arrangements (pension, cycle-to-work, EV lease, childcare voucher legacy schemes, holiday purchase) reduce both taxable pay and NIable pay. PayslipIQ identifies the most likely arrangement from the payslip line items, but cannot:

• Confirm the contractual variation document is in place.
• Verify HMRC reporting on benefit-in-kind values for non-cash benefits.
• Model the long-term effect of reduced reference earnings on statutory benefits (SMP, mortgages, state pension qualifying years).

For salary-sacrifice strategy decisions, talk to your employer and an independent financial adviser.

8. Umbrella company limitations

Umbrella company payslips often combine the assignment rate, employer NI, employer pension, apprenticeship levy, holiday pay and the umbrella margin in ways that look very different from a direct PAYE payslip. PayslipIQ:

• Applies the same PAYE, NI and student-loan logic to the employed earnings line.
• Surfaces the most common over-deduction patterns (employer NI not pre-uplifted, holiday pay rolled-up incorrectly, margin opaque).
• Does not model IR35 status determinations, off-payroll working rules, or the deemed employer position.
• Recommends comparing the assignment rate quoted to you against the gross pay actually shown - and contacting your agency or the umbrella for a written breakdown if anything is unclear.

See the dedicated /uk/umbrella-company-payslip-checker page for a step-by-step walkthrough.

9. Emergency tax limitations

Emergency tax codes (M1, W1, X, BR, 0T) are flagged automatically. We can:

• Identify when a non-cumulative basis is being used.
• Estimate the over- or under-payment for the current period.
• Suggest the correct route to update HMRC and trigger a refund through payroll.

We cannot:

• Trigger a refund on your behalf.
• Replace your HMRC personal tax account as the source of truth on what code should apply.
• Predict when your employer will receive an updated coding notice (P6/P9).

10. Why results are estimates

Real payslips contain rounding decisions, employer-specific payroll software quirks, mid-year coding changes, retrospective adjustments, and benefits-in-kind that may not be visible on a single pay period. PayslipIQ uses publicly published rates and the figures you supply; it does not have access to your HMRC record, your previous employer's submissions, or your scheme administrator.

For these reasons we present results with explicit ranges (e.g. "PAYE expected £487 ± £15") and label every line as one of: looks consistent, worth checking, or possible issue. We never present a result as a definitive HMRC calculation.

11. When to contact payroll, HMRC, your pension provider, an accountant or an adviser

PayslipIQ is designed to surface questions to ask. Use this page as a routing guide:

• Payroll team - for any deduction, allowance, code basis, holiday pay or overtime line that is wrong or unclear on this period's payslip.
• HMRC (gov.uk personal tax account) - to update your tax code, correct estimated income, or trigger a coding notice.
• Your pension provider / scheme administrator - for contribution rate questions, transfers, annual allowance and statement queries.
• Your accountant - if you have multiple income sources, self-employment, foreign income, or you intend to file a Self Assessment return.
• A regulated financial adviser - for any decision involving pension transfers, salary-sacrifice strategy, or large irreversible financial moves.
• Citizens Advice or Acas - for unpaid wages, holiday pay disputes, or unlawful deductions from wages.

In all cases PayslipIQ is a second opinion to help you ask sharper questions - never a replacement for the source of truth.