A Guide to Understanding Your Payslip

Your payslip should no longer be a mystery. We have created an easy to read, digestible guide to help you understand your payslip. For further assistance, do not hesitate to contact our dedicated customer service team.

  1. Basic Pay – Net pay before any deductions are calculated.
  2. Unique Tax Reference Number (UTR) – A unique 10-digit code used by HMRC to identify an individual or business.
  3. Expenses – Business related expenditures that are tax-deductibles.
  4. National Living Wage (NLW) – The obligatory minimum wage payable to workers in the United Kingdom.
  5. Holiday Pay – An allowance an employee can accumulate through work (12.07% of salary).
  6. Margin – The fee charged by the umbrella company for processing payroll, considered a tax-deductible.
  7. Employer’s National Insurance (NI) – A company cost subsidised by the worker (13.8% of gross salary over £175 of weekly earnings). Workers often receive an uplift in pay to cover most of this cost.
  8. Employee’s National Insurance (NI) – An obligatory employee contribution by HMRC’s tax system (12% of gross salary over £242 of weekly earnings).
  9. Taxable Pay – The amount of earning subject to tax.
  10. Non-Taxable Pay – Any business related expenses that are not subject to tax or NI contributions.
  11. Tax – The total amount of tax paid by worker, shown weekly.
  12. National Insurance – Standard personal contribution for health care, pensions, and other state benefits.
  13. Year to Date (YTD) – The total sums contributed within the current tax year (tax year: April 6th to April 5th of following year).
  14. Net Pay – The final take-home pay after all deductions, contributions and expenses are calculated.

We hope that our breakdown guide has allowed you to understand your payslip better. If you are looking to partner and outsource your payroll with a trustworthy umbrella company, offering expertise, reliability, and a commitment to excellent service. Choose Futurelink Group to experience hassle-free and efficient payroll management, allowing you to focus on what you do best – your work. #MakingWorkLessTaxing

Call: +44 (0) 1923 277900

Email: sales@futurelinkgroup.co.uk

Read our recent article to further help you understand Umbrella Company Terms.