The legal minimum
A compliant payslip shows gross earnings, take home pay, and every deduction that varies, tax, National Insurance, student loan, pension, each itemised with its amount. Fixed deductions can be aggregated only if you issue a standing statement of fixed deductions and refresh it annually. Where wages are paid in more than one way, the split must be shown. It must be given on or before payday, on paper or electronically.
The hours rule for variable pay
Since April 2019, if any element of pay varies according to time worked, the payslip must show the hours behind that element, either as a single total or broken down by rate. This is the rule zero hours and shift heavy employers breach most, and it exists so workers can check their pay against the National Minimum Wage. A salaried employee with fixed pay needs no hours shown; add paid overtime that month and the overtime hours must appear.
Understanding the entries
The tax code drives Income Tax, 1257L being standard for 2026/27; W1 or M1 suffixes mean emergency, non cumulative calculation. The NI category letter drives National Insurance, A for most adults, M for under 21s, H for apprentices under 25. Pension rows show employee contributions, and under salary sacrifice the sacrifice reduces gross pay rather than appearing as a deduction, which is why sacrificed pensions can look invisible. Year to date columns let anyone reconcile to their P60 at year end.
Lawful and unlawful deductions
Deductions are only lawful if required by statute, authorised by the contract, or agreed in writing before the event giving rise to them. Overpayment of wages is a specific exception you can recover, though doing it without warning invites disputes. Retail staff get extra protection: deductions for till or stock shortages are capped at 10% of gross pay per payday. Unlawful deduction claims go to tribunal with a 3 month time limit and no fee, making them one of the most common claims small employers face.
Penalties and practicalities
A worker denied a compliant payslip can get a tribunal declaration, and where deductions were not properly shown, the tribunal can order repayment of unnotified deductions even if they were otherwise lawful, an expensive technicality. Keep payslip data at least 3 years for HMRC, 6 for minimum wage purposes. Electronic payslips are fine provided workers can actually access them, including after they leave.
Making payslips work for you
A clear payslip cuts payroll queries dramatically: label pension rows with the scheme name, show holiday balances if software allows, and add employer pension contributions as an information line so staff see the full value of the package. If producing compliant payslips every cycle is a drain, our payroll service issues branded, compliant e-payslips as standard, alongside the RTI filings behind them.
Frequently asked questions
Who is legally entitled to a payslip?
All employees and workers, including zero hours and casual staff, on or before payday. Genuinely self employed contractors are the main exception.
What must a payslip show by law?
Gross pay, net pay, every variable deduction itemised, fixed deductions either itemised or covered by a standing statement, the method of payment where split, and the hours worked where pay varies by time worked.
Can an employer make deductions without consent?
Only 3 types of deduction are lawful: those required by law such as tax and National Insurance, those authorised in the contract, and those the worker agreed to in writing in advance. Retail workers have extra protection capping till shortage deductions at 10% of gross pay.