Understanding Your UK Payslip: Every Line Explained

Quick answer

A UK payslip is split into three zones:

1. Identifying info — your name, NI number, tax code, payroll number, pay period and pay date.
2. Earnings — gross salary, overtime, bonus, holiday pay, statutory pay, expenses.
3. Deductions and net — income tax, NI, pension, student loan, anything else negotiated, then your net (take-home) pay.

Plus a YTD column running totals since 6 April.

Below, line by line.

The top section: who, when, how much

Tax code

The most important number on the page. Standard 2025/26 is 1257L.

• 1257 → £12,570 personal allowance.
• L → standard allowance.
• M → you've received Marriage Allowance (+£1,260 PA).
• N → you've given Marriage Allowance away (−£1,260 PA).
• K → your deductions (e.g. company-car BIK) exceed your allowance. You owe tax against a "negative" allowance, and the number tells HMRC by how much.
• BR → Basic Rate. All income from this employment taxed at 20%, with no allowance applied (usual for second jobs).
• D0, D1 → flat 40% or 45% respectively.
• NT → No Tax (rare; agreed with HMRC).
• 0T → Allowance fully used up elsewhere or unknown — taxed without an allowance.
• Suffix W1/M1/X → emergency tax code, non-cumulative basis.

NI number

Format AB 12 34 56 C. You only ever have one. If you don't know it, find it in HMRC's Personal Tax Account or your P60.

Pay period & date

Pay period tells your payroll which set of cumulative thresholds to use. Pay date is when the money actually arrives.

NI category letter

For most employees, this is A. Other common ones:

• C — employee is over State Pension age (no employee NI).
• B — married woman or widow paying reduced rate NI (rare and legacy).
• H — apprentice under 25.
• M — under 21 (employer doesn't pay NI on this employee on earnings up to the UEL).

Earnings section

Basic / Salary

Your contracted gross monthly or weekly figure — annual salary ÷ 12 (or × 52 ÷ 365 × period days, depending on employer).

Overtime, bonus, commission

Always taxed in the month received. A one-off £5,000 bonus can briefly push you into a higher tax band that month, with PAYE correcting it later in the year if your annual income doesn't actually exceed the threshold (this is the cumulative system at work).

Statutory payments

Sick Pay (SSP), Maternity Pay (SMP), Paternity Pay (SPP), Shared Parental Pay, Bereavement Pay. These are paid by your employer but reclaimed (partly or fully) from HMRC. They're taxable like ordinary pay.

Expense reimbursements

If shown above net pay, they're either non-taxable (legitimate business expenses) or taxable. Mileage at HMRC's approved 45p/mile is non-taxable up to 10,000 business miles; anything above 45p/mile is taxable.

Benefits-in-kind (BIK)

These often don't show as a line on the payslip — they hit your tax code instead. A £5,000 company-car BIK will reduce your annual tax code allowance by £5,000, so over the year you pay about £2,000 extra tax (40% taxpayer) through PAYE — silently, line by line.

Deductions section

Income tax (PAYE)

The amount of UK income tax for this pay period. Cumulative system, so it can vary month-to-month even on identical gross pay if you had unusual income earlier in the year.

National Insurance

For 2025/26 employees pay:

• 0% on earnings up to £12,570 (the Primary Threshold)
• 8% on £12,571–£50,270 (Upper Earnings Limit)
• 2% above £50,270

So someone on £40,000 a year (£3,333/mo gross) pays about £190 employee NI per month. Higher earners can run the numbers in our

.

Pension contribution

Two main schemes:

1. Net pay arrangement / Relief at source — pension contribution is deducted after tax. HMRC adds 20% basic-rate top-up directly to your pension pot; higher-rate taxpayers claim the rest via Self Assessment.
2. Salary sacrifice — contribution is taken from gross salary before tax and NI. The payslip will usually show a reduced gross pay rather than a separate "pension" deduction. You save income tax and NI on the slice.

Salary sacrifice schemes typically deliver a 28%–42% saving on the contribution depending on your tax band, so check which one your employer uses.

Student loan repayment

Six possible plans. For 2025/26:

You repay 9% (or 6%) on the excess over the threshold. You can be on multiple plans simultaneously (e.g. Plan 2 + Postgraduate Loan), which the payslip will list separately.

Court orders, attachments, other deductions

Court-ordered child maintenance, council tax attachment of earnings, union dues, share scheme contributions, employee-paid medical insurance. Each will be a distinct line.

Net pay

The figure you actually receive. Gross pay − all deductions = net.

On a £30,000 salary in England, that breaks down monthly as roughly:

(Excludes pension, student loan, etc.)

The YTD (year-to-date) columns

Cumulative since the start of the tax year on 6 April. PAYE relies on these because it's a cumulative system: each month, HMRC's instructions to your employer are "based on how much they've earned YTD, how much tax should they have paid YTD?"

That's why:

• A pay rise mid-year doesn't usually cause weird tax behaviour — the cumulative system corrects it.
• A week 1 / month 1 (W1/M1) tax code breaks this cumulative behaviour and treats each period in isolation — common when you start a new job mid-year.
• Your P60 (issued at the end of the tax year) is essentially a snapshot of the final YTD column from your last payslip.

When to query a payslip

You should check the figures every payslip and query if:

• Your tax code changes without HMRC notifying you.
• Your YTD income or tax columns don't make arithmetic sense across consecutive months.
• A bonus or overtime gets taxed at a flat 40% with no later correction (likely M1/W1 issue).
• Your pension contribution rate appears wrong after a salary review.
• A benefit you expected (cycle scheme, EV lease) doesn't appear.

Errors in your favour will eventually be reclaimed by HMRC; errors against you may need you to chase them.

See it modelled

If the maths on your own payslip looks off, run your specific salary and pension setup through the calculator below — it implements 2025/26 HMRC rates exactly and shows month-by-month breakdowns.

Sources

• HMRC: Income Tax: rates and allowances
• HMRC: National Insurance: rates and categories
• HMRC: Tax codes
• HMRC: Student loan repayments
• Employment Rights Act 1996 — itemised pay statement requirements