If you’re setting up a company in the UK and plan on employing people, it’s important to know that in the UK, all employees and workers are entitled to an individual, detailed written UK payslip – when, or before, they’re paid. This payslip has been a central part of British working culture for many years and still remains an important part of the employment picture for UK workers.

The written payslip isn’t necessarily on paper any more – many organisations now produce electronic copies instead, usually sent to staff by email or accessed through a website. The right to a payslip applies to casual staff as well as employees. However, it doesn’t apply to independent contractors or people working freelance.

Every payslip must show the following information.

  • Gross pay. This is the full pay before any tax or National Insurance has been taken off.
  • The total amount of take-home pay after deductions. In the UK, this is called net pay.
  • The amounts of any deductions that change from payday to payday, and what the deductions are for. These are known as variable deductions. They include tax and National Insurance (NI).
  • The total amount of any fixed deductions. These are deductions that don’t change from payday to payday – for example, union dues. An employer doesn’t have to give details of what these deductions are for,  as long as they give a separate statement with these details at least once a year.
  • The amount and method of any part payment. This might refer to separate figures of a cash payment and the balance credited to a bank account.
  • The number of hours worked if your pay varies by the amount of time worked.

In some companies the employer might decide to include extra information on the payslip which they don’t have to provide. For example:

  • Tax code
  • National Insurance number
  • Pay rate (annual or hourly)
  • Extra payments, such as overtime, tips or bonuses. These must be included in your gross pay figure.

Your employees may have questions about the different Every payslip will include most of the following, so it’s worth knowing what each one refers to, and why it’s important to include it on as payslip. You can use this list as a guide for any employees

Personal information: Your name, and sometimes your home address, will be shown.

Payroll number: Some companies use payroll numbers to identify individuals on the payroll.

Date: The date your pay should be credited to your bank account is usually shown.

Tax period: This number represents the tax period for that payslip as related to the tax year. For example, if you’re paid monthly, 01 = April and 12 = March.

Tax code: Your tax code will be sent to you by HMRC. The code tells your employer how much tax-free pay you should get before deducting tax from the rest. If the code is wrong, you could end up paying too much or too little tax. So it’s important to check this against your latest tax code notice.

NI number: Everyone must have a National Insurance number to work in the UK. You have the same NI number throughout your life – even if you change your name. It’s your personal number for the entire social security system. It’s used to make sure all your contributions are recorded properly and helps to build up your entitlement to benefits – such as a pension.

Payments, wages, bonuses and commission: This will show how much you’ve earned in wages before any deductions are made. It might also show how your pay was calculated. For example, your hourly rate and the number of hours worked. It could also show any extra payments you’ve earned on top of your basic pay, such as like bonuses, commission or overtime.

Expenses: The employer might pay any expenses owed to you via the payroll. Some employers will list each expense payment separately on the payslip. Others combine them to show a taxable or non-taxable amount.

Summary of the year to date Your payslip might show how much you have been paid so far in this financial year. A financial year runs from 6 April to 5 April. It might also show totals for how much you’ve paid in tax, National Insurance, student loans and pensions.

Net pay – what’s left: For many people, this is the most important figure on their payslip – the amount they get when all the deductions have been made. Many companies advise employees to check this against their bank statement to make sure it matches what’s paid in.

At Paul Beare we offer a full suite of payroll services to help you ensure your employees are paid correctly, on time and with the right documentation. So, wherever you are in your growth journey, getting the right advice and support from an accountancy practice is vital. That’s why at Paul Beare Ltd we offer a full range of accounting services, from tax and payroll to accounting and banking.