A payslip is a formal document (usually one page) which is given to you each month by your employer as a proof of income.
A payslip will confirm the amount that will be paid to the staff member, any tax, pension and insurance deductions that have been taken out and it is commonly used for accounting purposes and as a proof of income and employment for products such as loans and mortgages.
Why are payslips important?
Payslips can be used as a vital piece of documentation to prove your earnings, the tax payments you have made, as well as any pension contributions you have paid.
Having proof of earnings in the form of a payslip can help with different situations, such as if you are looking to rent or purchase a property, get a credit card, mortgage or buy a car.
In addition, having payslips can also be beneficial when applying for a loan. Many payday lenders or companies that offer personal and unsecured loans will require proof of income, and the simplest way is usually providing a recent payslip, confirming how much you receive in monthly earnings.
Does everyone receive a payslip?
No. There are some situations which mean you will not receive a payslip. This can include if you:
- Work as a contractor
- Are a freelancer
- Are in the police service
- Work as a merchant seaman
- Do one-off jobs, have multiple clients and receive cash in hand (e.g babysitters, cleaners, market stall)
What is shown on a payslip?
- Gross wages (i.e. the total wages you earn prior to other deductions)
- The individual amount of any fixed reductions
- The net amount of your wages (what you receive after-tax deduction)
- The total amount of deductions
- Individual amount of deductions made
A payslip from your employer will also usually include the following information:
- Your National Insurance number
- Any additional payments (for example, a bonus, overtime or tips)
- Your annual or hourly pay rate
- The tax code
When do you receive a payslip?
It is a legal requirement for your employer to give you a payslip, but how often they issue one is flexible. For example, many employers these days decide that they would prefer to give a payslip through electronic means (email, online) instead of using paper slips, considered to be the more traditional approach.
What happens if there is a problem with my payslip?
From time-to-time, you may find inaccuracies with your payslip, either the details or because you have been the wrong income.
If this happens, it is recommended to always contact your employer as a first step to see if it can be sorted in-house. Otherwise, you could look at contacting a trade union or employee representative for guidance and advice.