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.