You accepted a job at an advertised salary, then your first payslip arrived and the number at the bottom looked smaller than expected. Don’t panic. This payslip explained guide shows where your money goes and what to do if something looks wrong.
Why Take-Home Pay Is Lower Than Advertised Pay
Advertised pay is your gross pay, the amount before anything is taken off. Your net pay is what lands in your bank account. The gap is made up of legal deductions. Your employer must give you a payslip showing both figures, plus a breakdown of each deduction.
Payslip Deductions Explained
Income Tax
You pay Income Tax on earnings above your Personal Allowance, currently £12,570 a year for most people. Your employer takes it automatically through PAYE, so you don’t need to send HMRC anything.
National Insurance
National Insurance contributions build your entitlement to benefits such as the State Pension. You pay them once your earnings pass a set threshold, and they appear as a separate line on your payslip.
Workplace Pension
Under automatic enrolment, eligible workers are put into a pension scheme. You pay in a percentage of your pay, your employer adds their share, and you usually get tax relief too. You can opt out, but you would lose your employer’s contribution.
Other Deductions
You may also see student loan repayments, union fees or salary-sacrifice schemes. Each one should be labelled clearly.
What Is a Tax Code?
Your tax code tells your employer how much tax-free pay you get. A common code is 1257L. Emergency codes, often marked W1, M1 or X, are common on a first payslip and can mean you pay too much tax until HMRC has your details.
What to Do If Your Payslip Looks Wrong
- Check your tax code against the one on your HMRC personal tax account.
- Compare your hours and pay rate with what you agreed.
- Ask your employer or payroll team to explain any line you don’t recognise.
- Contact HMRC if your tax code is wrong, as it can fix it and refund any overpaid tax.
Get Payslip Support From ACS Staffing Solutions
Understanding your pay shouldn’t be a guessing game. At ACS Staffing Solutions, our team supports candidates from the first placement to the first payslip and beyond, whether you’re temping or looking for a permanent role.
Got a question about your pay, or looking for your next opportunity? Get in touch with ACS today and let’s talk.
Frequently Asked Questions
Why is my first payslip different from my second?
Emergency tax codes and part-month pay often cause this. It usually settles down once HMRC confirms your details.
Do temporary workers get payslips?
Yes. Temporary and permanent workers are both entitled to one .
Can I get overpaid tax back ?
Yes. If you've paid too much, HMRC will refund it once your tax code is corrected.
What should I do if I’ve been underpaid?
First, check your hours, pay rate and any agreed overtime against your payslip. Then raise it with your employer or payroll team as soon as possible, ideally in writing. Also check that your hourly rate meets the National Minimum Wage for your age.
Why is there a student loan deduction on my payslip?
If you have a student loan, your employer takes repayments through payroll once your earnings pass the threshold for your repayment plan. It shows as its own line, and you only repay on income above that threshold.
What happens if I have more than one job?
Each employer needs to know about your other income so your tax is calculated correctly. Your Personal Allowance is usually applied to your main job, and your second job may use a different tax code. If your code looks wrong, check it in your HMRC personal tax account or contact HMRC.
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