Understanding Payslips

Your employer should provide you with a payslip each pay period and these should show your name, NI number, tax code and breakdown of payments and deductions.

Payment - This should be your gross salary before any deductions for tax, NI and any other deductions.

 

Tax - This is based on your tax code. Your tax code gives you your tax-free allowance for the current tax year.

 

The standard code for 21/22 tax year is 1257L - this means you can earn £12,570.00 a year before you pay tax.

 

This allowance is split equally over your pay periods for the year, i.e.

weekly - £241.73 per week

monthly - £1,047.50 per month

 

You then pay tax at 20%, then 40%.

Employees NI - You can earn £184.00 per week / £797.00 per month before you have to pay NI and any earnings above these amounts you pay NI at 12%.

Net Pay - This is the amount that you keep after tax and NI deductions.