Get Tax Ready
Gross Pay − Deductions = Net Pay
Understand how your earnings turn into the money in your bank account.
Total Earnings
01. Gross Pay
Your full pay before any tax or other costs are taken away.
Government Funding
02. Income Tax
A contribution from your earnings to fund UK public services.
Benefit Entitlement
03. National Insurance
A payment towards your State Pension and specific benefits.
Other Costs
04. Other Deductions
Such as pension contributions or student loan repayments.
The Important Bit
05. Net Pay
The 'take-home' pay that lands in your bank account.
Tax Calculation
06. Tax Code
Tells your employer how much Income Tax to deduct (learn how to check yours in Get Tax Ready).
Records & Retention
Once you get paid, the work isn't quite done. Keeping good records is the best way to make sure you're being treated fairly and paying the right amount of tax. Remember to keep every payslip you receive—they are your proof of earnings and deductions. If something looks wrong, your first step is always to check your official tax record. HMRC’s digital tools make this simple and fast.
HMRC Digital Tools
The HMRC app and your Personal Tax Account are your best friends. Use them to instantly check your current tax code, find your National Insurance number, and update your personal details if you move house.
I think something is wrong
If you encounter these issues, it's time to take action:
- Strange Tax Code: Your code doesn't look like 1257L or seems unusual for a first job.
- Too Much Tax: You feel you're being taxed more than you should be based on your earnings.
- Missing NI Number: You haven't received your National Insurance number or can't find it.
- Address Change: Your employer or HMRC has an old or incorrect address for you.
- Confusing Payslip: You cannot understand the entries or totals on your pay statement.
HMRC’s app and your Personal Tax Account can help you check your tax code, NI number, and personal details securely.
First Job Red Flags
Watch out for these warning signs that something might not be right with your employment:
- No Payslip: Every employee has a legal right to a payslip on or before payday.
- Unclear Calculations: You can't see how your pay or deductions have been calculated.
- Missing Information: Your employer hasn't collected usual information like your P45 or NI number.
- No Explanations: Nobody at work can explain why certain deductions are being taken from your pay.
Pre-Job Checklist
National Insurance Number
Your NI number is your personal tax ID. Find it on your NI card, letters about benefits, or your HMRC record. You'll need it to get paid correctly.
Understand Your Tax Code
Your tax code (like 1257L) tells your employer how much to deduct. Make sure it's right so you don't pay too much or too little tax.
Know What PAYE Is
Pay As You Earn (PAYE) is the system your employer uses to pay your tax and NI directly to HMRC before your wages hit your bank account.