THE RIGHT
From your first payday
Acas says the Employment Rights Act 1996 requires employers to give employees and workers payslips from their first payday, including zero-hours and agency workers.
What it must show
WHAT THE RULES SAY
Read the slip,
not just the total.
Most of us look straight at the bottom line.
The rest of the payslip tells you how that number was reached: what was earned, what was taken off and why. This independent guide explains what UK law says a payslip must show and what the common codes mean, using GOV.UK, HMRC and Acas pages.
ON OR BEFORE payday, by law
Decode a line- Gross before net
- Every deduction shown
- Hours if pay varies
- What a payslip must show
THE SHORT ANSWER
It is your right,
and your record.
Payslips are also proof of earnings,
tax paid and pension contributions.
THE CODE
Letters and numbers
Your tax code tells payroll how much tax-free pay you get. GOV.UK says 1257L is the code currently used for most people with one job or pension.
Decode a line
NEW JOB
Watch for M1 or W1
A code ending in W1, M1 or X is an emergency code, often used at the start of a new job. HMRC usually updates it within 35 days.
About emergency codesGeneral information only, not financial advice. For advice on your own situation, speak to a regulated financial adviser or a free money-advice service.
FOUR THINGS IT MUST SHOW
What the law says
a payslip contains.
GOV.UK and Acas set out the minimum. Many payslips add more, such as the pay period and your tax code.
Gross pay
Your earnings before any deductions.
Variable deductions
Amounts that can change each payday, such as Income Tax and National Insurance.
Net pay
What is left after deductions: the amount actually paid to you.
Hours, if pay varies
If your pay depends on time worked, the hours must be shown. Acas says overtime must be recorded even on a fixed salary.
TWO NUMBERS WORTH KNOWING
Where the code
and the pension line come from.
One figure behind the most common tax code,
one behind the auto-enrolment pension line.
£12,570
Standard tax-free Personal Allowance
HMRC starts from the Personal Allowance, takes off things like company benefits, then swaps the final digit for a letter: £12,570 becomes 1257L.
PERSONAL ALLOWANCE · GOV.UK
8%
Minimum total auto-enrolment contribution
GOV.UK's table since April 2019: employer at least 3%, you 5%, 8% in total. In most auto-enrolment schemes this is worked out on earnings between £6,240 and £50,270 a year.
PENSION · GOV.UK
Scheme rules can set higher amounts. GOV.UK suggests MoneyHelper's contributions calculator to see what goes into your own pension.
A QUICK PAYSLIP DECODER
What does
this line mean?
Pick something you might see on a payslip. The bar shows how unusual it is for a typical single-job employee, and so how much it may be worth a closer look.
From GOV.UK tax code pages and HMRC's emergency tax code guidance. General information only, not tax or financial advice: HMRC's 'check what your tax code means' tool covers your own code.
EMERGENCY CODES
Why a new job
can mean odd tax.
Usually tax is worked out on your total income so far in the tax year. On an emergency code it is worked out on that week or month alone. GOV.UK says giving your new employer your P45 can help take you off it, and HMRC usually updates the code within 35 days.
If a payslip looks wrong or does not arrive, Acas says to speak to your manager or payroll team first, then raise a formal grievance if needed; a missing payslip can ultimately go to an employment tribunal. The Acas helpline can answer questions.
Questions
Questions people ask
Does everyone have a right to a payslip?
Employees and workers do, including zero-hours and agency workers. GOV.UK and Acas list exceptions such as the self-employed, contractors and freelancers, the police, merchant seafarers and share fishermen.
Can my payslip be online only?
Yes. Employers can choose printed or electronic payslips. Acas says that if someone cannot access them online, the employer should provide another format, such as paper.
What are fixed deductions?
Deductions of a set amount, such as repaying a season ticket loan. Employers can list them on the payslip or in a separate written statement, which Acas says is valid for 12 months.
How do I find my tax code?
GOV.UK says it is on your payslip, in your HMRC online account or app, or on a Tax Code Notice letter from HMRC.
How long do employers keep pay records?
Acas says an employer must keep records of hours worked and payments made for the last 6 years.
Sources
- GOV.UK: Payslips, employee rights
- Acas: Payslips
- GOV.UK (HMRC): Tax codes, what your tax code means
- GOV.UK (HMRC): Tax codes, emergency tax codes
- GOV.UK: Workplace pensions, what you, your employer and the government pay
Updated