A UK payslip packs a lot of shorthand into a small space, and almost none of it is explained on the document itself. Here's what each line actually means, working down the page, with 2026/27 figures where a number helps.
Gross pay is your pay before anything comes off. Below it you may see basic, OT (overtime), comm (commission) or BIK (benefit in kind, a non-cash perk such as private medical cover that gets taxed as though it were pay). Two other totals sit near it and rarely match. Taxable pay is the slice income tax is worked out on, after things like a salary sacrifice pension have been taken off. NI-able pay is the slice National Insurance is worked out on, and salary sacrifice reduces that too, which is exactly why the scheme exists.
Every one of those figures usually appears twice: once for this pay run, and once as YTD, meaning year to date. The UK tax year runs 6 April to 5 April, so a YTD column in May is only counting a few weeks, not since January.
Four things account for nearly every deduction on a normal UK payslip.
| On the payslip | What it is |
|---|---|
| PAYE or Tax | Pay As You Earn, income tax taken at source every payday rather than in a bill at the end of the year. |
| NI, NIC or EE NI | Your National Insurance. In 2026/27 that is 8% of earnings between £12,570 and £50,270 a year, then 2% above that. EE means employee, ER means employer. |
| Pension, EE pens, AE | Your workplace pension contribution under auto-enrolment. The statutory minimum is 8% of qualifying earnings in total, of which at least 3% comes from the employer. |
| SL or PGL | Student loan and postgraduate loan. Plan 1 starts at £26,900, Plan 2 at £29,385, Plan 4 at £33,795 and Plan 5 at £25,000, all at 9%. Postgraduate loans start at £21,000 at 6%. |
Figures are 2026/27 rates for England, Wales and Northern Ireland. The full rates and thresholds page has the rest.
The tax code tells payroll how much tax-free pay to give you. 1257L is the standard one for 2026/27: the number is your Personal Allowance of £12,570 with the last digit dropped. The letter is where the meaning sits.
| Code | What it means for your pay |
|---|---|
| L | The standard Personal Allowance applies. Nothing unusual. |
| BR | All of this job's pay is taxed at 20%, no allowance. Normal on a second job, a red flag on your only one. |
| D0 / D1 | All of it at 40%, or all of it at 45%. Again, usually a second income. |
| NT | No tax to be deducted at all. Rare, and always worth understanding why. |
| K | The letter comes first, as in K475. It means untaxed income or a benefit outweighs your allowance, so an amount is added to your taxable pay instead of taken off. |
| W1 / M1 / X | Week 1 or month 1, an emergency basis. Each pay run is taxed in isolation with no cumulative running total, which often means paying too much until it's corrected. |
Apart from a new starter's code, which the employer works out from the P45 or starter checklist, a code only changes when HMRC issues a notice to the employer. If yours looks wrong, the fix has to go through HMRC, and the employer updates your record as soon as possible, before your next payday. That notice is a P6, or a P9 before a new tax year. Every code letter, including M, N, T and the S and C prefixes, is in our UK tax codes guide.
Somewhere near your National Insurance number there is a lone capital letter. It sets which NI rules payroll applies to you, and in most cases it affects what your employer pays more than what you pay.
There are further letters for Freeport and Investment Zone sites. If one of those is on your payslip, your employer will know why.
If you have been off sick or on family leave, the pay line changes name. SSP is Statutory Sick Pay, SMP Statutory Maternity Pay, SPP paternity, ShPP shared parental, SAP adoption and SNCP neonatal care. They're legal minimums paid through payroll, taxed like ordinary pay, and your contract may well pay more on top. Anything above the statutory figure is your employer's own scheme, not a government one.
Two documents use the same shorthand and are not payslips. A P45 is what you get when you leave a job, showing pay and tax to date. A P60 is the year-end summary of everything you were paid and taxed, and you should have one by 31 May after the tax year ends. For 2026/27, benefits in kind that were not put through payroll turn up on a P11D by 6 July 2027. That's changing: from April 2027 employers must put company cars, car fuel, vans and van fuel and medical benefits through payroll, and from April 2028 most other benefits.
Your payslip only shows money that belongs to you and money taken out of it. Employer National Insurance, 15% of earnings above the £5,000 secondary threshold in 2026/27, is paid by the employer on top of your salary, where it's due, and is nowhere on the document. An overseas employer with no UK presence, whose employee pays their own tax and NI through a DPNI scheme, usually doesn't owe it at all. Neither is their pension contribution beyond what the statutory line shows, nor the cost of running the payroll itself. That's worth knowing if you're ever negotiating, because what you cost your employer is a bigger number than your gross pay. We cover the employer's side in employer National Insurance explained.
Seeing a UK payslip for the first time?
Say an architecture practice in Lisbon hires a project architect who lives in Sheffield. The practice has no UK office, but as an EU employer it usually owes UK employer's National Insurance, so the UK payroll runs through an NI-only scheme set up by the practice. The payslip looks much like any other UK one: gross pay, NI at category A, pension, YTD columns. The difference is income tax. An NI-only scheme doesn't collect it, so the architect pays it through Self Assessment, or through a separate tax-only scheme set up alongside. We run that scheme for a fixed £157 a month for one employee, and the employee gets a proper payslip from month one.
If you work in the UK for an employer based abroad, or you run payroll for one, tell us the situation and we will tell you straight what should be on there and what it should cost. Honest answers, within one UK business day.
Ask us about itQuick enquiry, we reply within 1 UK business day