Understand Your Payslip, Tax Code and PAYE / Lesson 1 of 8
Your payslip, line by line
Six lines, four of them deductions. Which ones can you actually change?
The short answer
- ✓ PAYE is cumulative, so an odd month usually corrects itself next payday
- ✓ National Insurance is worked out per pay period and never evens out
- ✓ Taxable pay is not the same as gross pay
- ✓ The tax code on your payslip is set by HMRC, not your employer
The anatomy of a payslip
Every UK payslip carries the same core information, however different the layouts look.
| Line | What it means |
|---|---|
| Gross pay | Everything you earned before anything came off |
| Taxable pay | Gross, less anything deducted before tax such as a net-pay pension |
| Income tax (PAYE) | Tax for this period, based on your tax code |
| National Insurance | Class 1, worked out on this period alone |
| Pension | Your contribution, and often your employer's shown separately |
| Student loan | Only if you are above the threshold for your plan |
| Net pay | What actually reaches your bank |
| Year to date | Cumulative totals since 6 April |
The year-to-date column matters more than the monthly one
PAYE is cumulative. Each payday your employer works out the tax due on everything you have earned so far this tax year, subtracts what you have already paid, and deducts the difference. That is why the monthly figure can jump around while the year-to-date figure stays sensible.
Month 4 of the tax year, £30,000 salary
Earned so far £10,000
Allowance used so far (4/12ths) £4,190
Taxable so far £5,810
Tax due so far at 20% £1,162
Tax already paid £871
---------
Deducted this month £291The useful consequence: if you are overtaxed one month, cumulative PAYE usually corrects it by itself in the next payslip. You rarely need to do anything.
National Insurance behaves differently
Class 1 NI is not cumulative. It is calculated on each pay period in isolation, at 8% between the primary threshold and the upper earnings limit, and 2% above.
That single difference explains one of the most common payslip questions: why a bonus month costs so much NI and never gets refunded. Income tax evens out over the year. National Insurance does not.
The bit nobody explains
Check the tax code printed on your payslip every April, and again whenever it changes. It is the one number on the page that decides everything else, it is set by HMRC rather than your employer, and it is wrong more often than people assume. Your employer simply applies whatever code it is given.
Common mistakes
- Reading only the net figure. The code above it is what you can actually influence.
- Panicking at one odd month. Cumulative PAYE usually self-corrects.
- Expecting an NI refund after a bonus. NI is per period and does not even out.
- Assuming your employer set your code. HMRC did.
Try it on your own numbers
This is the same calculator as the full tool page, using 2026/27 rates.
Payslip details
Free and unlimited - no signup. Figures are an estimate based on standard 2026/27 rates and a cumulative tax code; an official payslip from payroll software may differ.
Payslip
Payments
Deductions
Key takeaways
- ✓ PAYE is cumulative, so an odd month usually corrects itself next payday
- ✓ National Insurance is worked out per pay period and never evens out
- ✓ Taxable pay is not the same as gross pay
- ✓ The tax code on your payslip is set by HMRC, not your employer
Check you have got it
3 quick questions. No score is kept, and you can change your mind.
1. You were overtaxed in month 3. What normally happens?
2. You got a large bonus and paid a lot of National Insurance. Will it even out later?
3. Who decides your tax code?
Sources
Finished this lesson?
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