Payslip checker - your payslips explained

Payslip checker - your payslips explained by Tom Bunkham Money might not always equal happiness, but an accurate payslip does…If you’ve recently moved to a new job, it’s essential to check that any deductions (such as tax and insurance) are being paid properly on your behalf. Otherwise, you could be left with a very disappointing payslip.To help you understand exactly what you should be earning, the Money Advice Service answered some key questions around payslips:What is a payslip?A payslip is a summary of your earnings and deductions issued by your employer on a weekly, bi-weekly, or monthly basis â€" depending on how often you get paid.Payslip exampleWhat is a payroll number?A payroll number is how the payroll department at your company distinguish between each employee. Your payroll number will usually be found on your payslip.Understanding your payslipYour payslip can include a range of information which could vary from company to company, but there are five things it must always display.These are:Gross pay â€" this is your full pay before any tax or National Insurance has been taken off, including any bonuses and commission.Variable deductions â€" this refers to the deductions that could change each payday, and will show the amount that’s being paid. It includes tax and National Insurance.Fixed deductions â€" these are the deductions which don’t change from payday to payday. 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. It could include union dues.The total amount of take-home pay â€" the amount displayed is after all deductions have been taken off.The amount and method for any part payment of wage â€" this could refer to separate figures of a cash payment and the balance credited to a bank account.What else will you see on your payslip?The format of your payslip will vary from company to company, and what’s included will depend on your individual earnings, benefits , and deductions.Here are eight additional pieces of information you may spot on yours, and what they mean:Your payroll number â€"  Some companies use payroll numbers to identify individuals on their payroll.The tax period â€"  The number here represents the tax period for that payslip. For example, if you are paid monthly, this would translate as: 01 = April and 12 = March.Your tax code  â€" This indicates the rate you’re taxed at.Your National Insurance (NI) number â€"  Your NI number confirms that you’re eligible for work in the UK.Expenses â€"  If you’re owed any expenses (e.g. travel costs or company lunches), these will be displayed here.Pensions â€"  If you’re paying towards a workplace pension that your company has set up or arranged access to, the amount you’re contributing will be shown.Student loan â€"  If you’re making student loan repayments, this will be shown on your payslip.Workplace benefits â€"  If you get health insurance or have a company car through an employment scheme, these will be listed on your wage slip.Tax codes explainedTax calculatorCan workplace benefits schemes save you money?Your payslip explainedDoes your payslip contain lots of confusing lingo?Fear not â€" here’s some answers to commonly asked payslip questions, to help you figure out what those words and figures really mean:What’s a tax code? This code tells your employer what rate you should be taxed at. To find out how much income you can earn in a year before you need to pay tax, simply add a zero to the number shown. For example, Tax code  1000L  means you can earn £10,000 a year before paying any Income Tax. The most common letter is L, which just means your tax rate is at the standard rate.What is total gross pay?   Your gross pay is what you’ve earned before any deductions have been taken off.What is total net pay? Your net pay is what you actually receive into your bank account once all the deductions have been taken off.What is the meaning of year -to-date (YTD) in a salary slip? This describes how much you’ve earned so far this year.What does payment method  mean on a payslip? Most employers will pay your earnings directly into your bank account. This is done through a system called Banker’s Automated Clearing Services, or BACS for short â€" which is what you’ll normally see on your payslip.UK payslip abbreviationsBACS Bankers Automated Clearing ServicesA payment scheme that processes financial transactions electronically.  BA/BP   Bereavement Allowance/Bereavement PaymentA weekly allowance given to widowers or surviving civil partners.    CHB Child BenefitAn allowance given to parents with children under 16.  CTC Child Tax CreditsAn allowance given to parents with children under 16.  ET Earnings ThresholdThe amount you can earn before being required to pay tax.HMRC Her Majestys Revenue and Customs  The department of government responsible for tax collection.LEL Lower Earnings LimitThe amount you can earn before being required to pay National Insurance.  NIC National Insurance ContributionsA sum deducted from your salary, in addition to tax.PAYE Pay As You EarnA tax deduction taken from HMRC.PILON Payment in Lieu of NoticeA compensation payment that covers the notice period of an employee who has been terminated/told not to work their notice.  PP Personal Pension  Payments made to a pension provider.  SAP   Statutory Adoption PayAn allowance given to people during the leave they take to adopt a child.    SEE Small Earnings ExceptionAn exemption of Class Two National Insurance contributions, given to self-employed people whos profits are less than £5,725 a year.  SMP Statutory Maternity PayAn allowance of 39 weeks, given to female employees during the leave they take before and after having a child.    SPP Statutory Paternity PayAn allowance of 2 weeks, given to male employees during the leave they take before and after having a child.    SSP Statutory Sick PayPay given to employees who have been absent  from work due to illness.  TY Tax YearThe year in which tax is calculated, starting 6th April in the UK.  VAT Value Added TaxValue based tax added to goods and services.  How can I check my payslip?Is something not quite adding up?Don’t be afraid to question anything that doesn’t look right on your payslip by getting in touch with your HR or Payroll department.It’s also a good idea to check your payslips regularly. Not only does this make sure no mistakes slip through, it also ensures that what your payslip says tallies with the amount that has been paid into your bank account.For more information, visit the Money Advice Service guide on  understanding your payslip.Paying too much tax? Heres what to do next  How to negotiate a pay rise Still searching for your perfect position? View all available jobs now