READ YOUR payslip

READ YOUR payslip what your payslip is actually trying to tell you finance matters. 1257L your tax code This is the standard code for most individuals. It indicates your personal tax allowance which means you can earn £12,570 before paying tax. If your tax code is different it could mean you are overpaying or underpaying tax either due to an over/underpayment in prior years or you simply have the wrong tax code. L You're entitled to standard personal tax allowance K Negative allowance, you owe tax T HMRC need to review your tax affairs M/N Utilising marriage allowance W1/M1/X Emergency codes finance matters. your gross vs net pay GROSS £42,000 NET £32,740 The gap between your base salary and your take home is income tax, NI, pension contributions, student loan repayments and any other deductions. Your net pay matters more for your financial management goals. finance matters. income tax & national insurance Your payslip will show the total value deducted but not the rates behind it. Your NI contributions play a role in your eligibility for the state pension. INCOME TAX This starts after your £12,570 personal tax allowance 20-45% YOUR NI 8% up to £50,270, then 2% above that 8/2% EMPLOYER NI Your employer pays 15% on your salary above £5,000. You won't see this. 15% finance matters. your other deductions This section shows you everything taken off your gross pay before it reaches you. Not everyone will have the same deductions, it depends on your situation. INCOME TAX Based on your tax code and earnings in the period NATIONAL INSURANCE Your employee NI contribution. The rate depends on your earnings PENSION Your contribution. The minimum is 5% under auto- enrolment STUDENT LOAN 9% on earnings above your plan threshold SALARY SACRIFICE Reduces your gross before tax. This could be your pension, childcare, cycle to work etc. OTHER Private healthcare etc. finance matters. read your payslip It helps to know whether your take-home and tax paid is accurate. finance matters.