Before anything else, your payslip shows your gross pay and your net pay. Everything in between is a deduction.
| Line | What it means | Example (£50,000/yr, monthly) |
|---|---|---|
| Gross pay | Everything you earned before deductions, including basic pay, overtime and bonuses. | £4,166.67 |
| Total deductions | The sum of tax, National Insurance, pension and any other deductions. | £1,033.34 |
| Net pay (take-home) | What actually reaches your bank account. | £3,133.33 |
PAYE — Pay As You Earn — is the income tax your employer deducts on behalf of HMRC. For 2026/27 the Personal Allowance is £12,570 and the basic-rate band runs to £50,270.
- Your tax code sets how much Personal Allowance you get. The standard code is 1257L.
- Earnings above the allowance are taxed at 20% (basic), 40% (higher) and 45% (additional) rates.
- Scottish and Welsh taxpayers use different rate bands — see our £100k tax trap guide.
Employee Class 1 National Insurance is charged on earnings above the primary threshold (£12,570 for 2026/27), at 8% up to the upper earnings limit and 2% above it.
| Band | 2026/27 rate |
|---|---|
| Below £12,570 | 0% |
| £12,570 – £50,270 | 8% |
| Above £50,270 | 2% |
These reduce your take-home pay but for different reasons.
| Deduction | Detail |
|---|---|
| Pension | Workplace schemes deduct a % of qualifying earnings. This also lowers the income taxed. |
| Student loan | Repayments start once pay exceeds the plan threshold (e.g. Plan 2: £27,295/yr). Deducted through PAYE. |
| Other | Childcare vouchers, union fees, salary sacrifice or court orders may also appear. |
Most payslips show a "YTD" column — the running total of each figure since the start of the tax year (6 April). This is how PAYE stays accurate across the year and why a one-off bonus can push you into a higher band temporarily.
Frequently asked questions
Why is my take-home pay less than my salary?
Your salary is your gross pay before deductions. PAYE income tax, employee National Insurance, pension contributions and any student loan repayments are taken off before you are paid, leaving your net (take-home) pay. Our calculator shows the full breakdown.
What does the 'Tax' or 'PAYE' line on my payslip mean?
PAYE is the income tax collected in real time by your employer under HMRC's Pay As You Earn system. It is calculated from your tax code and cumulative earnings in the tax year, not just the current pay period.
What is the difference between gross pay and net pay?
Gross pay is everything you earned before deductions. Net pay (or take-home pay) is what actually lands in your bank account after tax, National Insurance, pensions and other deductions.
Why does my tax code appear on my payslip?
Your tax code tells your employer how much Personal Allowance to apply before taxing the rest. A wrong code means you could be over- or under-paying tax. See our tax codes guide for what each code means.