Key takeaways
- Gross pay, pension, taxable pay, tax, National Insurance, student loan, net pay — each line has a meaning, and each one can be checked.
- On £35,000, net pay is £27,569.20 a year, £2,297.43 a month — and it should match, to the penny, the money that arrives in your bank.
- A wrong tax code is the single most common payslip error, and it is worth hundreds of pounds a month.
- Five checks, one minute, once a month: gross pay, tax code, pension, student loan, and net pay against your bank.
Your payslip has one job: to show how your gross pay becomes the money in your bank. Gross pay, pension, taxable pay, tax, National Insurance, student loan, net pay — each line has a meaning, and each one can be checked.
Most people look at two numbers on their payslip: the gross at the top and the net at the bottom. Everything in between is a mystery, and that is a shame, because the middle lines are where mistakes hide — the wrong tax code, a pension percentage that changed without you noticing, a student loan deduction that should not be there. This article walks through a real payslip line by line, on a £35,000 salary, so you can check your own.
The example: £35,000 a year, paid monthly
Our example employee earns £35,000 a year, is paid monthly, is on tax code 1257L, pays the usual auto-enrolment pension (5% of qualifying earnings) and has no student loan. Here is the whole payslip, first for the year and then for one month.
| Line | Per year | Per month | What it is |
|---|---|---|---|
| Gross pay | £35,000.00 | £2,916.67 | Your full salary before anything is taken off. |
| Pension | −£1,438.00 | −£119.83 | 5% of qualifying earnings (£6,240–£50,270). |
| Personal allowance | £12,570.00 | £1,047.50 | Tax-free amount from your tax code (1257L). |
| Taxable pay | £20,992.00 | £1,749.33 | Gross minus pension minus allowance. |
| Income tax | −£4,198.40 | −£349.87 | 20% of taxable pay (basic rate). |
| National Insurance | −£1,794.40 | −£149.53 | 8% of pay between £12,570 and £50,270. |
| Student loan | £0.00 | £0.00 | None on this payslip. |
| Net pay (take-home) | £27,569.20 | £2,297.43 | What lands in your bank. |
A note on the monthly figures: they are the annual figures divided by 12, so the monthly lines add up to £2,297.44 rather than £2,297.43 — a penny of rounding. The annual figures are the authoritative ones. Small rounding differences like this are normal and are not an error.
Gross pay
Gross pay is your salary before anything is taken off. Monthly, it is your annual salary divided by 12: £35,000 ÷ 12 = £2,916.67. If you are paid weekly it is divided by 52; if you are paid four-weekly, by 13. Check this line first. If it is wrong — because of unpaid leave, a late pay rise, or overtime that was not included — everything below it will be wrong too. Overtime, bonuses and commission are usually shown as separate lines that add into the gross.
Pension
Under auto-enrolment, you pay at least 5% of your qualifying earnings into your pension, and your employer pays at least 3%. Qualifying earnings are the slice of your salary between £6,240 and £50,270 — not your whole salary. On £35,000, qualifying earnings are £28,760, so your 5% is £1,438.00 a year. Your employer pays another £862.80 on top, which does not appear on your payslip as a deduction (it is not taken from your pay) but should appear on your pension statement.
The pension line matters for tax, because your contribution comes off before income tax is worked out. That is why your taxable pay is £20,992, not £22,430. It does not reduce your National Insurance, which is charged on your full gross pay.
Personal allowance and taxable pay
Your personal allowance is the amount you can earn tax-free each year: £12,570 for most people in 2026/27. Your tax code encodes it — 1257L means £12,570 of allowance. Taxable pay is what is left after your pension and your allowance are taken from your gross: £35,000 − £1,438 − £12,570 = £20,992. Income tax is charged on this figure only.
If your tax code is not 1257L, your allowance is different. A BR code means no allowance at all; a K code means a negative allowance — extra pay added to your taxable income. Check the code, not just the number: a wrong code is the single most common payslip error, and it is worth hundreds of pounds a month.
Income tax
Income tax is charged at 20% on taxable pay up to £37,700, 40% above that up to £125,140, and 45% above that. Our example's taxable pay of £20,992 is entirely inside the basic-rate band, so the tax is £20,992 × 20% = £4,198.40 a year, or £349.87 a month. In Scotland the bands are different — six bands from 19% to 48% — but the principle is identical.
PAYE, the system that takes the tax, is cumulative. Each month it looks at what you have earned so far in the tax year, what tax you should have paid on it, and deducts the difference. That is why a bonus month looks over-taxed and why later months correct it. It is also why your tax can change mid-year if your pay changes.
National Insurance
National Insurance is 8% of your pay between £12,570 and £50,270 a year, then 2% above £50,270. On £35,000 that is 8% of £22,430, which is £1,794.40 a year, or £149.53 a month. Unlike tax, NI is worked out per pay period, not cumulatively — each month stands on its own against the monthly thresholds of £1,048 and £4,189.
Your employer also pays National Insurance: 15% of your pay above £5,000 a year. On £35,000 that is £4,500.00 a year. It does not come out of your pay and it is not usually printed on your payslip, but it is part of what you cost to employ.
Student loan
If you have a student loan, the deduction is 9% of your pay above your plan's threshold — £29,385 for Plan 2, £25,000 for Plan 5, £26,900 for Plan 1, £33,795 for Plan 4 — or 6% above £21,000 for a Postgraduate loan. It is taken through payroll automatically, and it stops when the loan is cleared or written off. If you have no loan, the line should be £0.00, and if it is not, ask payroll why.
Net pay — and the lines below it
Net pay is what is left: £27,569.20 a year, £2,297.43 a month. It should match, to the penny, the money that arrives in your bank account.
If it does not, something is wrong — usually a deduction that was taken after the payslip was printed, or a bank delay.
Below the net pay you will usually find year-to-date figures: your gross, tax, NI and pension so far this tax year. These are worth a glance every month. They are the numbers HMRC uses, and if they drift from what you expect, it is much easier to fix in November than in April. You will also find your NI number, your tax code, and your employer's PAYE reference — the three things you need for any conversation with HMRC.
Five things to check every month
One: gross pay matches your salary for the period. Two: your tax code is the one you expect. Three: pension is the percentage you agreed. Four: student loan is the right plan and the right amount — or £0 if you have no loan. Five: net pay matches your bank. Five checks, one minute, once a month. Most payslips will pass all five. The one that does not is worth a conversation with payroll the same day, because tax errors only get more expensive with time.
Check your own payslip
Put your salary into the take-home pay calculator and compare every line with your payslip. If your tax code looks wrong, read Emergency tax codes: why your first payslip looks wrong — and the 2026/27 rates behind every figure on this page.
Questions
What should I check first on my payslip?
Four things: your gross pay matches your salary divided by your pay frequency; your tax code is right (1257L for most people); your National Insurance is 8% of pay above £1,048 a month; and the net pay matches what landed in your bank. If any of those is wrong, ask payroll before anything else.
Why is my first payslip lower than I expected?
Usually an emergency tax code. If your employer did not have your P45 or a starter checklist in time, you may be on 0T or BR, which tax all your pay with no personal allowance. On £35,000 that costs £209.50 a month until the right code arrives — and the overpaid tax comes back through later payslips or an HMRC repayment.
What is the difference between gross pay and taxable pay?
Gross pay is your full salary before anything is taken off. Taxable pay is what is left after your pension contribution and your personal allowance (£12,570 a year). Income tax is charged on taxable pay only — which is why pension contributions lower your tax bill.
Five checks, one minute, once a month
Gross pay matches your salary for the period, your tax code is the one you expect, pension is the percentage you agreed, student loan is the right plan and amount — or £0 — and net pay matches your bank.
Figures are for tax year 2026/27, tax code 1257L, England, Wales or Northern Ireland, auto-enrolment pension at 5% of qualifying earnings, no student loan. Rates: GOV.UK — last checked 5 November 2026. This site is not affiliated with HMRC or GOV.UK. Figures are estimates for guidance, not financial advice.