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Payslip basics

Most employees receive payslips and take them for granted, but what are the legal requirements?

All employees, including those working part-time and temporarily, are entitled to receive a written payslip on or before their pay day. The Employment Rights Act (ERA) sets out the required contents of a payslip:

  • Gross pay
  • Amounts and purpose of variable and fixed deductions e.g. PAYE, NIC, student loan, pension etc.
  • Net pay
  • Method of payment (where different amounts are paid in different ways)

Employers deducting premiums for pensions must show the deduction clearly on the payslip.

In practice, most employers give much more information than the basic statutory requirements. For instance, it is obviously good practice to analyse gross pay to show:

  • Basic pay
  • Overtime (hours and rate)
  • Bonus, commission, etc.
  • Special allowances
  • Sick pay (including statutory sick pay)
  • Statutory payments (namely statutory maternity pay; ordinary statutory paternity pay; additional statutory paternity pay and statutory adoption pay)
  • Holiday pay

Use our payslip calculator to check your net pay.

It is also usual to show the period covered by the payment, and the date of payment.

When distributing payslips or other confidential information, it is important to be aware of data protection rules. The new requirements, known as GDPR, mean that it is unlikely to be acceptable for you to email unencrypted payslips to employees. We can advise you further if you would like more help understanding the requirements.

You can significantly reduce queries from employees by giving basic details such as:

  • National insurance number
  • PAYE tax code
  • Tax office name and reference