Read a UK payslip in this order: confirm the pay period, rebuild gross pay from basic and variable earnings, identify every deduction, then check that net pay matches the amount deposited. Overtime, commission and cash bonuses are earnings, while PAYE tax, National Insurance, pension contributions and loan repayments are deductions. The labels and layout differ between employers, so the figures and their basis matter more than the position on the page.
The examples and thresholds below are UK-specific. If you work elsewhere, use your country’s payroll and employment rules instead.
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What a payslip is for
A payslip is both a payment statement and a useful record. In the UK, it can provide evidence of your earnings, tax paid and pension contributions. Keep it with your contract, timesheets and bank records rather than treating it as a disposable breakdown of one month’s money.
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Employers use different labels and layouts. One may call a line “basic pay”, another “salary”, and a third may separate ordinary hours from a shift premium. The underlying sequence is the same: earnings build the gross figure; deductions are taken from that figure or under a specified payroll arrangement; net pay is the amount left for payment.
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Your employer should provide the statement on or before payday. Start by checking the period covered and the payday shown, because a bonus or overtime entry can relate to an earlier period under the employer’s payroll cut-off.
1. Confirm the pay period before checking the numbers
Find the dates or payroll period on the statement and compare them with the payday. A monthly payslip might cover work completed up to a cut-off date rather than every hour worked through the final calendar day. A weekly statement may use a week number or a date range.
- Check that the statement is for the payday you expected.
- Match the period with your rota, timesheet, expense record and any published payroll cut-off.
- Note whether a commission or bonus is described as relating to the current period, a previous period or a separate payment run.
This prevents you from treating a timing difference as a missing payment. If the period is wrong, ask payroll to confirm which run contains the missing item before trying to recalculate tax.
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Gross pay is the total earned before deductions. Do not assume it is simply your annual salary divided by 12: hours, overtime, commission, allowances and one-off payments can all change the figure for a particular period.
Basic salary or ordinary wages
Check the ordinary-pay line against your employment agreement and the expected pay frequency. For salaried staff, the amount can be adjusted for a starter or leaver date, unpaid leave or a contractual change. For hourly staff, the rate and paid hours are more informative than an annualised figure.
Hours-based pay and overtime
When pay varies according to time worked, UK payslips must show the number of hours worked. The hours rule is separate from the calculation used for National Minimum Wage purposes. Compare the stated hours with your approved timesheet or rota, then check the rate applied to ordinary, overtime, night or weekend hours.
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Commission, tips and other variable earnings
Commission may be calculated on sales, collections, margin or another measure in your contract or commission plan. Identify the performance period and the date on which the amount becomes payable. If a commission line is lower than expected, compare the underlying sales report and the plan’s exclusions rather than using the payslip alone.
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Some employers show shift, travel, call-out or location allowances separately. A correction, arrears payment or backdated increase may also appear as its own line. Read the description and period carefully; a separate line does not automatically mean a separate tax treatment.
| Earnings line | What to verify |
|---|---|
| Basic salary or ordinary wages | Contracted rate, pay frequency and any starter, leaver or unpaid-leave adjustment |
| Hourly or variable-hours pay | Hours shown, rate per hour and the matching rota or timesheet |
| Overtime or premium hours | Authorised hours, premium rate and payroll cut-off |
| Commission | Performance period, qualifying transactions and commission-plan formula |
| Cash bonus | Bonus notice or agreement, payment period and whether the amount is gross |
| Allowance, arrears or correction | Description, covered dates and whether it reverses an earlier entry |
Add the earnings lines yourself. The resulting total should reconcile to the payslip’s gross-pay figure. Keep a note of any line you cannot identify; asking about one named item is more effective than asking why the whole payslip “looks wrong”.
3. Understand how bonuses affect payroll
A cash bonus is earnings for UK payroll. HM Revenue & Customs states: “The bonus you’ve paid counts as earnings, so:” employers add it to other earnings and deduct PAYE tax and Class 1 National Insurance through payroll.
That rule does not mean every bonus is taxed at a special flat rate, nor can you determine an individual’s net bonus from the bonus amount alone. Payroll combines the bonus with the pay in that run and applies the employee’s tax code, National Insurance category and other relevant deductions. A large one-off payment can therefore make the deductions on that payslip look unusually high even when the calculation is correct.
Non-cash awards can follow different rules. Shares, goods, vouchers or benefits may have their own reporting and valuation treatment, so do not automatically apply the cash-bonus rule to an award that was not paid as money.
What to compare when a bonus seems wrong
- Read the bonus letter, plan or contract for the promised amount, eligibility date and payment date.
- Check whether the payslip shows the bonus as gross earnings and whether a correction or recovery line offsets it.
- Compare the payslip’s total gross pay with the payroll calculation or statement supplied by your employer.
- Check the resulting tax, National Insurance and other deductions rather than assuming the bonus itself was reduced by a fixed percentage.
4. Identify every deduction
Deductions are not one category with one rule. Some are required by law, some arise from your contract or a written agreement, and some are employee benefits or repayment arrangements. A clear payslip should identify each item sufficiently for you to ask payroll what it represents.
| Deduction | Why it may appear | What to check |
|---|---|---|
| PAYE income tax | Tax withheld through payroll | Tax code, taxable pay and whether the code changed |
| Class 1 National Insurance | Employee National Insurance on relevant earnings | National Insurance category and the pay period’s thresholds |
| Employee pension contribution | Workplace-pension arrangement | Contribution rate, salary basis and whether it is taken through the arrangement used by your scheme |
| Student or postgraduate loan | Repayment triggered by earnings above the applicable plan threshold | Plan type, threshold and whether payroll has the correct plan |
| Payroll Giving | Charitable donation authorised through payroll | Your donation instruction and the amount deducted |
| Child maintenance or another legal order | Payment required under the relevant order or process | Notice, reference and amount supplied by the responsible authority |
| Contractual or agreed recovery | For example, an authorised advance or overpayment recovery | Contract clause or written agreement and the repayment schedule |
Tax and National Insurance depend on employee details held by payroll, including the tax code and National Insurance category. A deduction that is unfamiliar or much larger than usual should be identified before you try to estimate whether it is right.
5. Use the tax code and National Insurance category as checks
Tax code
Your tax code tells payroll how to apply income-tax allowances and other adjustments. If the code changes, the tax on the same gross pay can change. Compare the code on the payslip with the code shown in your HMRC tax account or coding notice. If you think the tax is wrong, official guidance says the tax code may be incorrect; ask HMRC to check it and tell payroll when a corrected code is issued.
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For most employees in the 2026–27 tax year, the current HMRC rates stated on GOV.UK are 8% on weekly pay from £242 to £967, then 2% on weekly pay above £967. The monthly equivalents are £1,048 to £4,189, then 2% above £4,189. These are date-bound examples, not a permanent payroll rule: confirm the rates, thresholds and your National Insurance category for the tax year covered by the payslip.
| Pay frequency (2026–27 example) | 8% band | 2% band |
|---|---|---|
| Weekly | £242 to £967 | Above £967 |
| Monthly | £1,048 to £4,189 | Above £4,189 |
Your category letter can change the applicable thresholds or rate. Do not compare your National Insurance line with a colleague’s without checking that both of you have the same category and pay frequency.
6. Check student-loan and postgraduate-loan deductions
Repayments are plan-specific. HMRC’s current payroll guidance lists these annual thresholds and rates:
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| Plan | Annual threshold | Rate above threshold |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
These thresholds and rules can change, and payroll applies them by pay period rather than by simply dividing an annual figure in every case. Check the plan stated in your repayment information and tell payroll if it has the wrong plan or has continued deductions after your loan provider’s instruction. A bonus or overtime payment can push one pay period above a threshold even when your usual pay does not.
7. Distinguish employee pension deductions from employer contributions
An employee pension contribution is taken from your pay under the workplace-pension arrangement and should be identifiable on the payslip. HMRC notes that pension contributions are normally taken after National Insurance and before tax, but the exact presentation depends on the arrangement used by your workplace pension provider.
An employer pension contribution is different: it is money your employer pays into the pension and is not automatically a reduction in your take-home pay. Do not subtract an employer-only contribution when checking the amount deposited. If the payslip shows both employee and employer lines, use the employee line when reconciling net pay and the employer line when checking the pension record.
8. Calculate and verify net pay
Net pay is the amount left after the deductions shown for that pay run. Locate the payslip’s net-pay figure and compare it with the amount credited to your bank account. A difference can arise from a separate payment, a bank timing issue or a payroll correction, so check the transaction date and payment reference before assuming an error.
Do not try to infer a tax rate from one payslip by dividing total deductions by gross pay. PAYE is cumulative for many employees, National Insurance uses pay-period thresholds, and loan or pension deductions follow their own rules. The useful reconciliation is: gross earnings listed on the statement, each identified deduction, the stated net figure, and the bank credit.
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Why did my take-home pay change?
When gross pay changes, first separate a change in earnings from a change in deductions. Use this comparison table to choose the next check.
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| Possible cause | Evidence to compare | First action |
|---|---|---|
| Different pay period or payroll cut-off | Dates on both payslips and the payday | Confirm which period contains the missing or delayed item |
| Changed hours or overtime | Hours, rates, rota and timesheet | Re-add the variable-hours lines |
| Commission or bonus | Plan, award notice and gross-pay lines | Ask how the payment period and eligibility were applied |
| Tax-code change | Current and previous tax codes; HMRC notice | Check the code with HMRC and payroll |
| National Insurance variation | Pay level, category letter and pay frequency | Apply the thresholds for the relevant tax year |
| Student-loan deduction | Plan type, threshold and repayment instruction | Verify that payroll has the correct plan |
| Pension change | Employee contribution rate and scheme notice | Check the workplace-pension record |
| Correction or recovery | Arrears, overpayment or adjustment lines | Request the calculation and repayment schedule |
When can an employer make a deduction?
UK guidance identifies several possible bases for a deduction, including a legal requirement, a written agreement, or authorisation in the employment contract. The payslip should make the item identifiable, and you should be able to ask what authority and calculation the employer used.
Protection against deductions reducing pay below the National Minimum Wage has exceptions. Whether an exception applies depends on the facts, the type of deduction and the reason it was made. A payslip alone cannot establish that a disputed deduction is lawful.
Questions to ask payroll
- What is the exact name and purpose of this deduction?
- Which contract term, written agreement, notice or legal process authorises it?
- Which pay period and calculation produced this amount?
- Is it a one-off correction, a recurring deduction or the first instalment of a schedule?
- Will it appear again, and when will it end?
Keep the response with the payslip. If the employer cannot explain the item or you believe it was not authorised, check your contract and obtain appropriate employment advice rather than simply cancelling a payment or ignoring the deduction.
A practical payslip troubleshooting sequence
- Confirm the statement. Match the pay period and payday; UK payslips should be provided on or before payday.
- Rebuild gross pay. Add basic pay, hours-based pay, overtime, commission, bonus, allowances and corrections. Match hours and rates with your records.
- List deductions. Mark each item as tax, National Insurance, pension, loan, charitable, legal or contractual, and note anything you cannot identify.
- Check employee details. Compare the tax code, National Insurance category, student-loan plan and pension contribution with the details held by the relevant provider or authority.
- Ask for an explanation. Send payroll the named line, period and amount; request the calculation rather than a general statement that the net pay changed.
- Escalate the right issue. Use HMRC guidance for a possible tax-code problem, the loan provider’s instructions for a repayment-plan issue, and appropriate employment advice for an unauthorised or disputed deduction.
- Keep the evidence. Retain payslips, timesheets, bonus notices, payroll replies and bank entries. Compare year-to-date totals and your P60 where relevant.
What to retain for future checks
Save each payslip in date order, including corrected versions. Keep the employment contract, commission or bonus terms, pension notices, student-loan plan information and any written deduction agreement alongside it. Year-to-date totals help identify when a cumulative tax or pension figure changed, while the P60 provides an end-of-tax-year record to compare with your payslips.
Use the payslip as evidence, not as the only source of truth. A missing hour may be resolved by the timesheet, a tax-code discrepancy by HMRC, and a disputed recovery by the contract and payroll correspondence.
UK-specific limits to keep in mind
The rules and figures in this guide are based on UK government guidance and the 2026–27 examples stated above. Tax thresholds, National Insurance rates, student-loan plans and workplace-pension arrangements can change. Confirm the tax year and the employee’s own category before relying on a number.
The cash-bonus payroll rule does not automatically cover non-cash awards. Likewise, an unfamiliar deduction cannot be judged lawful from its label alone: the reason, authorisation, pay level and surrounding facts matter. If payroll cannot resolve a specific case, use the appropriate official tax, loan or employment-advice route.
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