Your first payslip, explained line by line
Your first payslip is dense with numbers and abbreviations nobody really teaches you to read. Here's what each part actually means, using a typical UK payslip as the template — yours might be laid out slightly differently, but it'll contain most of these same pieces.
Gross pay
This is your total pay before anything is taken off — your salary or hourly wage for the period, in full. Every deduction below is calculated from this number, so it's the one to check first if a payslip looks wrong (for example, if your hours or rate are mistyped).
Tax code
A short code (often something like 1257L) that tells your employer how much of your pay to treat as tax-free. The numbers usually relate to your tax-free Personal Allowance for the year — currently £12,570, frozen until April 2031 — and the letter adjusts for your specific circumstances. If yours ends in W1 or M1, or reads 0T or BR, you may be on a temporary "emergency" basis, which is common on a first payslip and usually sorts itself out within a pay cycle or two.
Income Tax (PAYE)
The tax taken off your gross pay above your tax-free allowance, under the Pay As You Earn system. HMRC sets the rates and bands each tax year; your employer's payroll software applies them automatically based on your tax code.
National Insurance (NI)
A separate deduction from Income Tax, which counts towards your entitlement to certain state benefits and the State Pension. For the 2026/27 tax year, employees don't pay NI on earnings up to £12,570 a year (£242 a week), pay NI at 8% on earnings between that and £50,270 a year (£967 a week), and 2% above that. Your payslip may also show an NI "category letter" (commonly A for most employees), which can affect the exact rate applied to you — for example, under-21s on standard contracts are often in a different category.
Pension contributions
If you're 22 or over, earning at least £10,000 a year, and under State Pension age, your employer is required to automatically enrol you into a workplace pension (you can opt out, but you'd be giving up free money if you do — see below). The current legal minimum total contribution is 8% of your "qualifying earnings" (broadly, the band between £6,240 and £50,270 a year), made up of at least 3% from your employer and the rest, typically 5%, from you — and your 5% usually includes tax relief, meaning some of what looks like "your" contribution is actually added by the government. Many employers pay more than the 3% minimum, which is worth checking, since it's effectively extra pay you'd otherwise miss.
Student loan deductions
If you have a student loan and you're earning above the repayment threshold for your specific plan (Plan 1, Plan 2, Plan 4, Plan 5, or Postgraduate Loan, depending on where and when you studied), your payslip will show an automatic deduction labelled "Student Loan," alongside which plan you're on. The repayment threshold differs by plan and changes periodically, so rather than quote a figure that might be out of date by the time you read this, check your plan and its current threshold directly on gov.uk's student loan repayment guidance — your deduction should match that threshold automatically through payroll.
Year-to-date (YTD) figures
Most payslips include a running total for the tax year so far — YTD gross pay, YTD tax, YTD National Insurance. This is useful for sanity-checking: if your YTD tax looks disproportionately high for how much you've earned so far, that can be a sign you're on an emergency tax code and might be due money back later.
Net pay
What's actually left after every deduction above — the amount that lands in your bank account. This is the number to budget against, not your gross/advertised salary, which is why a new job's "headline" salary and your actual monthly take-home can feel surprisingly different at first.
Ask your employer's payroll or HR contact first — mistakes happen, especially with a first payslip. If you want an independent check, your free Personal Tax Account on gov.uk shows your tax code, income, and an estimate of whether you've over- or under-paid, directly from HMRC's own records.
If your first payslip shows an emergency tax code, or you've left a job partway through a tax year, there's a good chance you're due some of that tax back.
Check if you're owed a tax refund with Refund Checker →
A one-line version of all of this
Gross pay minus tax, National Insurance, pension and any student loan deduction gets you to net pay — and your tax code is the single most useful thing on the page for spotting whether something's gone wrong.