How to read your payslip
A payslip shows what you earned, what was taken off and why. This guide goes through each line, explains what a tax code such as 1257L means, and lists the checks that catch most mistakes.
Last updated:
The figures are for 2026/27 and for England, Wales and Northern Ireland. Scottish taxpayers pay different rates of income tax.
What a payslip must show
Your employer must give you a payslip on or before payday, on paper or electronically. By law it must show:
- your pay before and after deductions (gross pay and net pay)
- deductions that change from one payday to the next, such as tax and National Insurance
- the hours you worked, if your pay varies with the time you work
Fixed deductions, such as repaying a season ticket loan, must be explained too, on the payslip or in a separate statement. HMRC says a payslip should also show your tax code.
An example payslip
Someone on £30,000 a year, paid monthly, with a Plan 2 student loan and no pension. These are the yearly figures from our take-home calculator divided by 12, so a real payslip can differ by a few pence.
| Gross pay | £2,500.00 |
|---|---|
| Income tax (tax code 1257L) | −£290.50 |
| National Insurance | −£116.20 |
| Student loan (Plan 2) | −£4.00 |
| Net pay | £2,089.30 |
Your tax code
Your employer uses your tax code to work out how much income tax to take. HMRC tells it which code to use.
The number is your tax-free pay for the year with the last digit removed. The standard personal allowance is £12,570, which gives 1257. HMRC lowers the number for things like untaxed income or company benefits. In gov.uk's example, medical insurance worth £1,570 leaves £11,000 tax-free and a code of 1100L.
The letters say how the code was worked out. The common ones are:
| Code | What it means |
|---|---|
| L | You get the standard personal allowance |
| M, N | Marriage Allowance: M if you received part of your partner's allowance, N if you transferred part of yours |
| T | Your code includes other calculations |
| 0T | Your allowance has been used up, or you have started a new job |
| BR, D0, D1 | All your pay from this job is taxed at one rate: 20% for BR, 40% for D0 and 45% for D1 |
| K | You have income that is not being taxed, and it is more than your allowance |
| NT | No tax is taken from this income |
| S, C | At the start of a code: taxed at the rates for Scotland (S) or Wales (C) |
| W1, M1, X | At the end of a code: an emergency tax code |
With an emergency code, tax is worked out on that payday's pay alone, not on your pay for the year so far, so you can pay the wrong amount. It usually happens in a new job before HMRC has your details. It is usually temporary: HMRC can take up to 35 days to update it.
Income tax and National Insurance
Income tax is charged on pay above your tax-free amount: 20% up to £50,270 a year, 40% up to £125,140 and 45% above that.
National Insurance is worked out on each payslip. In 2026/27 you pay 8% on monthly pay between £1,048 and £4,189, and 2% on anything above. Your payslip also shows a category letter. Most employees have A.
Student loan and pension
Student loan repayments are taken at the same time as tax and National Insurance, and your payslip shows the amount. On Plan 2 you repay 9% of monthly pay over £2,448. Tell a new employer which plan you are on, and check they have it right.
Under automatic enrolment at least 8% of a band of your earnings goes into your pension: at least 3% from your employer and usually 5% from you. With salary sacrifice, tax, National Insurance and student loan are all worked out on a lower salary. If the contribution is taken before income tax, you pay less tax but the same National Insurance. With relief at source it is taken after tax, and your provider claims 20% from HMRC.
How to spot a mistake
- Compare the tax code on your payslip with the one HMRC holds, in its Check your Income Tax service or the HMRC app. If they are different, speak to your employer.
- If they match but the code does not fit your circumstances, tell HMRC. A wrong code usually means HMRC has missing information. It sends you and your employer the new code within 15 working days.
- Look for an emergency code that is still there more than 35 days into a new job.
- Check the hours and rate if your pay varies.
- Question any deduction you do not recognise. Your employer can only take money the law requires or allows, that your contract allows, or that you have agreed to in writing.
If something looks wrong, speak to your employer first. If you have paid too much tax, the refund normally comes through your pay. For a deduction that should not have been made, Acas can help, and you have the right to go to an employment tribunal.
Common questions
Does everyone have the right to a payslip?
Employees and workers do. Contractors and freelancers do not.
Who do I tell if my tax code is wrong?
HMRC. Your employer has to use the code HMRC gives it.
Whose job is it to check my tax?
Yours. gov.uk says it is your responsibility to make sure you pay the right amount.
Check your own figures
The take-home pay calculator works out tax and National Insurance from a salary. The student loan repayment calculator shows what each plan takes.
Where this comes from
All from gov.uk: payslips, checking your payslip, what your tax code means, emergency tax codes, updating your tax code, National Insurance rates, category letters, repaying a student loan, workplace pension contributions and deductions from your pay.