TAX BASICS

Your First Payslip

Got your first payslip? Don’t panic—it’s just a summary of what you’ve earned and where the money goes. It’s an essential document that proves your income and ensures you’re being paid fairly. Understanding it is a great first step toward managing your money like a pro.

Gross Pay – Deductions = Net Pay. Check your payslip every month to make sure everything looks right.

Sample Payslip

Employer: BrightStart Café
Employee: A. Student
Pay date: 30 April
Pay period: 1-30 April
Gross pay: £800
Income Tax: £40
National Insurance: £24
Other deductions: £16
Net pay: £720
Tax code: 1257L

Abbreviations

PAYE: Pay As You Earn
NI: National Insurance
YTD: Year to date
SL: Student Loan
PEN: Pension

What each line means

Employer: The business that pays your wages.
Employee: The person receiving the wages.
Pay date & period: The window of time and the specific day you are paid.
Gross pay: Your total earnings of £800 before any taxes or costs are taken.
Income Tax: The £40 levy collected by the government through the PAYE system.
National Insurance: The £24 contribution to state benefits and pensions.
Other deductions: The £16 allocated for your workplace pension scheme.
Net pay: The £720 'take-home' amount that actually hits your bank account.
Tax code: The 1257L code tells your boss how much tax-free pay you get.