UK payslips are full of abbreviations that can be confusing if you’re not familiar with them. Whether you’re starting a new job or just want to double-check your deductions, it’s important to know what each line means.
This guide explains the most common payslip abbreviations in clear terms, so you can quickly understand your earnings, tax, and contributions with confidence.
What’s on a Typical UK Payslip?
Most UK payslips follow a similar structure. While formats can vary between employers, you’ll usually see these sections:
- Employer and employee details
- Employee’s payslip pay period and date
- Earnings (basic pay, bonuses, etc.)
- Deductions (taxes, pensions, loans)
- Net pay (take-home amount)
- Tax code and National Insurance number
Abbreviations are often used to save space and fit everything onto one page, especially in digital or printed formats.
What Are The Common Payslip Abbreviations and What Do They Mean?
Struggling to decode your payslips? Your struggle ends here. Here are some of the most common payslip abbreviations and a little about them to help you get started.
Income and Wages Abbreviations
1. BASIC – Basic Pay
This is the core amount of earnings you’re paid for the work outlined in your contract, based on your standard hours or salary. It doesn’t include bonuses, overtime, or any other extra payments. It’s your starting point for calculating gross taxable pay earnings.
2. OT – Overtime
Overtime refers to any hours worked beyond your contracted schedule. These hours are often paid at a higher rate (e.g., time and a half or double time). The abbreviation “OT” helps separate this extra pay from your basic salary.
3. BON – Bonus
A bonus is an additional payment awarded for meeting certain targets, outstanding performance, or as part of a company’s profit-sharing scheme. It may be discretionary or contractually agreed upon.
4. COMM – Commission
Commission is performance-based pay, typically awarded as a percentage of sales you’ve made. Common in roles like retail and sales, this pay can significantly increase total earnings depending on performance.
5. HOL – Holiday Pay
Holiday pay is the payment you receive when taking paid time off. In the UK, workers are entitled to a minimum amount of paid holiday per year, and this pay is often listed separately to clarify it’s not tied to active working hours.
Deductions Abbreviations
1. TAX / PAYE
Income Tax (Pay As You Earn) is the amount of income tax, known as a tax deduction, automatically deducted from your salary and employee pays directly to HMRC by your employer. The PAYE system ensures you don’t have to file self-assessment tax returns unless you have additional income or circumstances.
2. NI / NIC – National Insurance Contributions
National Insurance helps fund state benefits like the NHS, pensions, and unemployment support. Both employees and employers contribute. The amount you pay depends on your earnings and your NI category.
3. PEN / PENSION
Pension Contributions from a pension provider and health insurance. This is the portion of your salary deducted and placed into a workplace pension scheme. If you’re auto-enrolled, this will be a fixed percentage of your earnings. Many employers also contribute an additional amount.
4. SSP – Statutory Sick Pay
If you’re off work due to illness for more than three qualifying days, you may receive Statutory Sick Pay. It’s a fixed rate set by the government and is paid by your employer for up to 28 weeks.
5. SMP – Statutory Maternity Pay
Statutory Maternity Pay is paid to eligible employees who take time off to have a baby. It typically starts at 90% of your average earnings for the first 6 weeks, followed by a flat weekly rate for the remainder of the 39-week period.
6. SPP – Statutory Paternity Pay.
Statutory Paternity Pay is paid to eligible employees taking time off to support a partner after childbirth, including those who may also receive bereavement allowance. It’s usually paid for one or two weeks at the standard government-set rate or 90% of average weekly earnings, whichever is lower.
7. SAP – Statutory Adoption Pay
This is the equivalent of maternity or paternity pay for employees who are adopting a child. The structure and rates are similar to SMP and SPP.
8. SL / SLG – Student Loan / Student Loan Graduate
These deductions go toward repaying your student loan, and the abbreviation used depends on the type of loan plan you’re on. The amount deducted depends on your income threshold and increases proportionally as your earnings rise.
Employer Contribution Abbreviations
1. ER NIC – Employer National Insurance Contributions
In addition to what you pay, your employer also contributes to National Insurance based on your earnings and the amount of tax that is applicable. This amount isn’t deducted from your pay but is still recorded on your payslip for transparency, including any relevant child benefit adjustments.
2. ER PENSION – Employer Pension Contributions
Employers must contribute to your pension scheme if you’re eligible and enrolled. This contribution is usually a percentage of your salary and is separate from your own pension deductions.
3. BEN / BIK
Benefits in Kind, such as CHB and child tax credits, refer to non-cash perks provided by your employer, such as a company car, private healthcare, or gym memberships. These benefits may be taxable and are declared on your payslip and P11D form.
Other Key Terms and Abbreviations
Now that you know the basic abbreviations, let’s look at some additional abbreviations that are commonly present in payslips.
Tax Codes and Status Indicators
1. 1257L – Standard Tax Code
This is the most common UK tax code and applies to people receiving the standard tax-free personal allowance (£12,570 for 2024/25). The number (1257) represents the allowance, and the “L” signifies eligibility for the standard rate.
2. BR – Basic Rate
This tax code means you’re being taxed at the basic 20% rate on all your income without any personal allowance in Scotland. It’s usually applied to second jobs or pensions where your tax-free allowance is already used elsewhere.
3. NT – No Tax
NT stands for “No Tax” and means that no income tax is being deducted from your earnings, especially below the earnings threshold in specific situations. This rare non-resident income arrangement may apply to tax-exempt scenarios, including certain cases where tax classifications, such as TY, come into play.
4. W1 / M1 – Week 1 / Month 1 Emergency Code
These codes mean your tax is being calculated only on that week’s or month’s income without looking at your year-to-date earnings. It’s a temporary emergency measure until HMRC updates your records.
5. YTD – Year to Date
This refers to the cumulative total of your earnings, taxes, and deductions since the beginning of the tax year (6 April). It’s useful for tracking how much you’ve paid or earned over time.
6. LEL – Lower Earnings Limit
The minimum amount you must earn in a week for National Insurance to start being considered. If you earn below this, you won’t build up contributions toward certain benefits.
7. UEL – Upper Earnings Limit
The upper threshold for National Insurance and VAT. Earnings above this point are charged at a lower NIC rate. It separates standard-rate NIC from reduced-rate NIC.
8. AE – Auto-Enrolment
Auto-Enrolment refers to the legal requirement for employers to automatically enroll eligible employees into a workplace pension scheme. Your payslip may show when deductions begin under this scheme.
9. RTI – Real Time Information
RTI is how employers report wages, taxes, and deductions to HMRC every time they pay employees. It ensures your tax records are always up to date.
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Conclusion
Getting the hang of your payslip is important when you want to handle your money the right way, especially when ensuring that your net income is accurately transferred to your bank account. By learning what key abbreviations like gross pay, deductions, and tax codes mean, you can track your income accurately and spot any discrepancies early. The more familiar you become with your payslip, the easier it is to stay in control of your earnings.
If you’re unsure about anything or want clarification, consider speaking with your HR team to make sense of your payslip with expert support.
Frequently Asked Questions
Why are there different tax codes on my payslip?
Different tax codes, including the emergency tax code, are used because people can have different personal allowances, second jobs, or extra taxable benefits. If any of these change, it can affect how much income tax you pay in each tax period. If you see that your tax code is wrong, check with HMRC. This helps make sure that the right deductions are taken from your pay.
What is a payslip tax code UK?
A tax code on your payslip tells your employer how much income tax to deduct based on your personal allowance and circumstances.
What does PAYE mean on a payslip UK?
PAYE stands for “Pay As You Earn”—it’s the system where your employer deducts tax and National Insurance from your wages before you’re paid.
What does “WK1/MTH1” mean next to your tax code?
This refers to Week 1 / Month 1 basis, also called non-cumulative tax. HMRC applies tax as if it’s your first paycheck of the year, which can be used temporarily during this period of time when there’s a change in employment or missing tax info.
