Your payslip in the UK, or pay stub in the US, is more than a record of what you were paid. It shows how your gross pay was worked out, what was taken off, and what actually reached your bank account. It’s worth a five-minute check: learning how to read your payslip helps you spot a wrong tax code or a missing overtime payment that you’d miss if you only glanced at the net figure.
Layouts vary by employer and payroll provider, but the sections are broadly the same. We’ll go through them line by line — from the header at the top to the year-to-date totals — and flag where a UK payslip and a US pay stub differ. It does not give specific current tax rates or bands, because those can change and depend on your personal circumstances.
The top of the slip: who, when and how you are paid
Start at the top. You should normally see your name, your employer’s name, and a pay date. You may also see an employee number or payroll number, your job title or department, and the pay period covered, such as a week or a month. Check that the pay period matches the work you expect to be paid for, and that the payment method and bank details look right.
In the UK, you may see a tax code and a National Insurance number. In the US, you may see filing or withholding information that your employer uses to work out tax withholding. You do not need to memorise these codes, but it is worth checking that your name and personal details are correct, and asking payroll if anything looks unfamiliar.
Gross pay: what you earned before deductions
Gross pay is the amount you earned before any deductions. For a salaried worker, it is usually the regular amount for the pay period. For an hourly worker, it is normally hours worked multiplied by the hourly rate, plus any overtime, bonus, commission or other taxable payments for that period.
Look for a breakdown if one is shown. It may list basic pay, overtime, holiday pay, and any allowances or bonuses separately. Adding those items together should give the gross pay for the period. If a figure looks too high or too low, compare it with your contracted hours, your rate or salary, and any extra shifts you worked.
Deductions on a UK payslip
On a UK payslip, the main deductions are usually income tax collected through PAYE, National Insurance contributions, and pension contributions, if you are in a workplace pension scheme. You may also see a student loan repayment, if that applies to you, and any other agreed deductions, such as a season ticket loan or a salary sacrifice arrangement.
Each deduction should be listed separately, so you can see what was taken and why. The total of all deductions is then taken from gross pay. If you want to estimate your take-home pay in advance, try the UK Take-Home Pay Calculator, and read our guide to Paycheck Deductions Explained: US vs UK for a general comparison.
Deductions on a US pay stub
On a US pay stub, deductions are often grouped in a similar way, but the names differ. You will usually see federal income tax withholding, and, depending on where you live and work, state and sometimes local tax withholding. You may also see Social Security and Medicare deductions, which are payroll taxes, plus retirement contributions, health insurance premiums, and any other voluntary deductions you have chosen.
As in the UK, each item should be shown separately for the current pay period. That breakdown matters, because a change in one item, such as a new health plan or a change in retirement contributions, will change your net pay even if your gross pay stays the same. To estimate US take-home pay, try the US Paycheck Calculator.
Net pay and year-to-date figures
Net pay, sometimes called take-home pay, is what is left after deductions: gross pay minus total deductions. For example, if gross pay for a month is £2,500 and total deductions are £600, net pay is £1,900. That is the amount you can actually use for bills, savings and spending, so it is the figure to base your budget on, not your gross pay.
Most slips also show year-to-date figures. These are the running totals for the tax year or calendar year so far, for gross pay, each main deduction, and net pay. Year-to-date figures are useful for checking that deductions are building up as expected, and for spotting a one-off error that might not be obvious in a single pay period.
Finally, remember that deductions are not all tax. Pension contributions are money set aside for your future, and health cover is a benefit you receive. See our guide to the marginal tax rate for why extra earnings are not always taxed at the same rate as your overall income.
Frequently asked questions
Why is my net pay lower than my gross pay?
Because tax and other deductions are taken before you are paid. Gross pay is what you earned, net pay is what remains after those deductions. The gap is not an error in itself; it is the total of the deduction lines shown on your slip.
What should I check first on a new payslip?
Check your name and pay period, your gross pay against your hours or salary, each deduction line, and your net pay. Then check the year-to-date totals. If anything does not match what you expected, ask your payroll team, with the slip to hand, before the next pay run.
Is a UK payslip the same as a US pay stub?
The idea is the same, but the terms and deduction categories differ. A UK payslip will refer to PAYE and National Insurance, while a US pay stub will refer to federal and state withholding, Social Security and Medicare. Both, however, move from gross pay, through deductions, to net pay, with year-to-date totals.
PennyCalcs provides educational information only and is not a financial advisor.