There is lots of information on payslips, but it isn’t always straightforward working out exactly what everything means. Different payslips from different employers can also sometimes look quite different, which can also be confusing. It’s important for employees to check their payslips so that any mistakes or issues can be flagged and resolved quickly.
P60s are something you’ll receive once a year if employed and also contain information that you may need to know if you need to prove things like the amount of tax you’ve paid, or the amount you have earned if you want to take out a loan or mortgage.
In this article, we look at both of these pieces of documentation to help you better understand what information they show and why it’s important.
What information must be on a payslip?
Under current UK regulations, your payslip must show the following information:
- Your gross pay – The amount you are paid before any tax, national insurance or other deductions are taken off.
- Your net pay – Also often called your ‘take-home pay’, this is the amount of money you actually receive after deductions have been made to your gross pay.
- Details of the variable deductions made to your gross pay – This will include any tax and National Insurance due, along with other deductions such as student loan repayments and workplace pension contributions.
- An amount for any fixed deductions made – These are deductions that don’t vary depending on what you are paid in the pay period, such as union membership. These deductions don’t have to be itemised on a payslip if the employer gives a separate statement with further details on an annual basis.
- Details if a part payment has been made – If your pay is received part-cash and partly into a bank account, these separate figures and payment methods will be detailed on your payslip.
- Your hours worked – If your pay varies, depending on the number of hours worked in a pay period, rather than being an annual salary, the hours you have worked should be on your payslip.
There are other pieces of information that employers often include on payslips that are not legally required, but can be useful, such as:
- Your current tax code
- Your National Insurance number
- Your pay rate (hourly or annual)
- Details of extra payments made to you, such as overtime you have worked, tips or bonuses. The amount paid for these should be included in your gross pay figure.
- Work expenses that you’ve claimed, if these are paid to you via payroll (some employers pay expenses separately)
There may also be personal information on your payslip, such as your name and often your address and payroll number. It will also usually include the date that you are paid and the tax period. For example, if you are paid monthly, there will usually be a number to represent that month, which often corresponds with the tax year (which starts on April 6th each year), so April is often 01 and March is often 12.
If you have a court order for repayments to a creditor to be taken from your wage before you receive it, or if you pay child maintenance, these deductions will also appear on your payslip.
If you have been off sick during the pay period and your employer pays sick pay, or if you were paid Statutory Sick Pay during that time, details of this will appear on your payslip.
If you have received maternity, paternity or adoption pay during the pay period details of this will also be on your payslip.
If you receive any benefits or ‘perks’ through your company, such as a company car or car allowance, or a health plan or private health insurance, these should be listed on your payslip too, along with any schemes you may have signed up to through work, such as a cycle to work scheme, a monthly charitable donation or a season ticket loan.
Payslips often also show how much tax and other deductions you have paid to date in the current financial year (6th April to 5th April the following year).
If you spot an issue or mistake with any of your payslips, it’s important to raise this with your employer as quickly as possible.
Understanding your P60
A P60 is a document that every employee should receive once a year. It shows the income that your employer has paid you for the previous tax year and the tax and National Insurance deductions made during that time.
HMRC issues every employee a tax code, and this tells your employer what they should deduct from your gross pay.
You should expect to receive your P60 from your employer by 31st May each year, detailing the previous tax year. If you complete a tax return or want to claim a tax rebate if you have overpaid tax, you’ll usually need the information on your P60 to do so.
If you have left an employer during the tax year, they don’t need to provide you with a P60. They should instead issue you with a P45, which details all the earnings and tax for the tax year, up to the date that you left that employment.
What’s included on a P60?
Your P60 should include your personal details to make it clear that the information relates to you. It will then give you an overview of your employed earnings and the tax paid during the previous tax year.
It will list your gross pay, your net pay and the income tax and National Insurance that you have paid, along with deductions such as student loan repayments and any statutory pay received in that period, like parental leave.
If you spot anything that looks wrong on your P60, it’s important to contact HMRC about this as soon as possible.
We hope that you’ve found this information useful in understanding your payslip and P60. If you’d like any personal tax advice or services, our specialist team can help. Get in touch to find out more.