Your payslip explained... PAYE TAX. Income Tax is deducted straight from your
wages by your employer. How much you pay depends on your Personal ...
Your payslip explained...
National Insurance
If you are employed you should get a payslip every week, fortnight or month depending on how your employer pays you. Payslips can get quite complicated, so check out the moneyfacts.co.uk basic guide to understanding this important document. Employee Number
PAYE TAX
This is the internal identification number your employer gives you
Income Tax is deducted straight from your wages by your employer. How much you pay depends on your Personal Allowance and the amount you earn.
Salary This is the amount you have earned before any deductions have been made. Your employer may break this down into components if you have done overtime or receive a bonus or commission.
Pension Contribution You may participate in an occupational pension scheme. If you do, your tax-free contribution (deducted from your wages) will be shown here. Your employer cannot take a pension contribution from your pay without your consent.
Holidays Your employer may include details of holiday days you have taken, or have yet to take. You are entitled to at least 5.6 weeks’ paid holiday per year (which is 28 days if you work five days a week).
Other Deductions If you are repaying a Student Loan, it will be deducted from your wages. There can also be other deductions here, such as a charity donation or a Christmas savings club, etc.
Tax Code and Tax Period Your Tax Code is very important as it tells your employer how much tax to deduct from your pay. If your Tax Code is wrong you could be paying too little or too much tax. Click here for more information about Tax Codes. The Tax Period relates to when this payslip is issued in the tax year (6 April to the following 5 April).
You pay National Insurance to be entitled to certain state benefits, including the state pension. Your employer deducts this directly from your wages. You may make reduced National Insurance contributions if you have “contracted out” of the State Second Pension.
This Period & Year to Date These sections show the total Pay, Tax, National Insurance you have been paid or have paid.
National Minimum Wage The current National Minimum Wage (as from 1.10.10) is as follows: · £5.93 per hour if you’re 21 or over · £4.92 per hour if you’re between the ages of 18 and 21 · £3.64 per hour if you’re 16 or 17 · £2.50 per hour if you’re in the first year of an apprenticeship · There is no National Minimum Wage if you are under the age of 16
Net Pay This is the sum of money you will actually be paid (after all deductions have been made) on your pay day. This is usually made by BACS transfer, although you could also be paid in cash or by cheque.
