Reading a payslip

Lesson 3 of 16 in our free Work, Payslips & Tax guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Work, Payslips & Tax is free for everyone.

Quick facts

Gross pay → What you earned. Your total pay before anything comes off.
PAYE income tax → Deductions. Tax taken by your employer and sent to HMRC.
National Insurance → Deductions. Builds your State Pension record and some benefits.
Tax code (e.g. 1257L) → Info / IDs. Tells your employer how much tax-free pay you get.
Pension contribution → Deductions. Comes off your pay — but it's YOUR money, saved for later (plus employer top-up).
Holiday pay / overtime → What you earned. Extra earnings — part of your gross.
Fact: “Your net pay is the number to budget with.” — Net is what actually arrives. Budgeting on gross is a trap.
Myth: “A pension deduction is money gone forever.” — It's saved in your name — and your employer usually adds to it.
Fact: “You should keep your payslips (or screenshots).” — They prove your pay for renting, benefits, refunds and disputes.