Your Payslip Explained
Your payslip contains a lot of numbers, codes, and abbreviations. Here's what every part means.
Gross Pay
This is your total pay before any deductions. If you're on a £36,000 salary, your gross monthly pay is £3,000 (£36,000 ÷ 12). If you've done overtime or received a bonus, this will be higher than your usual amount.
Tax Code
Your tax code tells your employer how much tax-free pay to give you. The most common code is 1257L, which means you get a £12,570 personal allowance. The number is your allowance divided by 10, and the letter indicates your situation.
Common Tax Codes
1257L — Standard personal allowance (most people)
BR — All income taxed at basic rate (20%), usually a second job
D0 — All income taxed at higher rate (40%)
NT — No tax deducted
K prefix — You owe tax from a previous year, so your allowance is reduced
W1/M1 — Emergency tax code (non-cumulative basis)
Income Tax
The amount of income tax deducted this pay period. This is calculated on a cumulative basis throughout the year, which means your employer looks at your total earnings so far and works out the correct total tax, then deducts what's needed to catch up. This is why your tax can vary month to month.
National Insurance (NI)
Employee NI contributions for 2025/26 are 8% on earnings between £12,570 and £50,270, then 2% above that. Your payslip may show your NI category letter (usually "A" for most employees).
Student Loan
If you have a student loan, repayments are deducted automatically. The amount depends on your loan plan type. Your payslip will show which plan you're on (Plan 1, 2, 4, or 5).
Pension
Your workplace pension contribution. Under auto-enrolment, the minimum employee contribution is 5% (of qualifying earnings), with your employer adding at least 3%. If you're in a salary sacrifice pension scheme, the deduction comes before tax, which is shown differently. See our pension calculator to project your pot.
Net Pay
This is the final amount that hits your bank account — your gross pay minus all deductions. This is your take home pay. Use our salary calculator to check your net pay is correct.
Year-to-Date (YTD) Figures
Most payslips show cumulative totals for the tax year (starting 6 April). These show your total earnings, total tax paid, and total NI paid so far this year. These figures should match your P60 at the end of the year.
Check your payslip is correct
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