Understanding Your P60 and Payslip: A Simple Guide

What Is a Payslip?

A payslip is a document your employer gives you each time you are paid. It shows your earnings and deductions for that pay period.

What Does a Payslip Show?

Earnings (What You Receive)

• Basic pay — Your salary or hourly rate × hours worked
• Overtime — Extra hours beyond your normal schedule
• Bonus — Performance or annual bonuses
• Allowances — Travel, shift, or other allowances

Deductions (What Is Taken Out)

• Income Tax (PAYE) — Tax on your earnings
• National Insurance (NI) — Contributions to state benefits and pension
• Pension contributions — If you are in a workplace pension
• Student loan repayments — If you have a student loan

Year-to-Date (YTD)

Your payslip usually shows a running total of your earnings and deductions for the tax year so far.

What Is a P60?

A P60 is an annual summary of your pay and deductions for the tax year (6 April to 5 April). Your employer must give you one by 31 May each year.

What Does a P60 Show?

• Total gross pay — Your total earnings before deductions
• Total income tax paid
• Total National Insurance paid
• Tax code — Used to calculate your tax allowance

Why Does This Matter?

• You need your P60 for tax records and loan applications
• Check it is accurate — errors can mean you overpaid tax
• Keep it safe — you may need it for up to 6 years
• If you leave a job, you still get a P60 for time worked

Common Tax Codes Explained

• 1257L — Standard tax-free allowance (£12,570)
• BR — All income taxed at basic rate (20%)
• D0 — All income taxed at higher rate (40%)

Understanding your payslip and P60 is part of everyday life in the UK. Learn more about the UK tax year and National Insurance.