Got Your First UK Payslip? Here's What Every Line Means

Receiving your very first UK payslip can be a genuinely confusing experience. The document is full of rows of numbers, deductions, and codes that most schools never teach you how to interpret. If you have just started your first job in the UK and your take-home pay is significantly less than you expected based on the salary you were offered, this guide will explain exactly what every single line means.

Why your take-home pay is lower than your salary

When a UK employer offers you a salary of, say, £28,000 a year, that figure is your gross pay — the amount before any deductions are applied. Your net pay (the actual money that lands in your bank account) is always lower because HMRC requires your employer to deduct Income Tax and National Insurance before paying you. Here is what each deduction on your first payslip actually means:

Line by line: Reading your first payslip

Gross Pay

Your total earnings before any deductions. For a monthly-paid employee on £28,000 a year, this should be £2,333.33 every month. If your gross pay looks wrong, check your contract — some contracts quote an annual salary inclusive of an annual bonus, meaning the monthly base pay is lower.

Tax Code

A code assigned by HMRC that tells your employer how much Income Tax to deduct. If this is genuinely your first ever UK job, you should ideally see 1257L — the standard code for 2026/27 that gives you the full £12,570 personal allowance. However, if you did not submit an HMRC Starter Checklist before your first payroll run, you might see 1257L W1 or 1257L M1 (an emergency, non-cumulative version) or even the dreaded BR code. These are fixable — ask your HR department for the Starter Checklist and fill it in immediately.

Income Tax (PAYE)

Income Tax deducted at source under the Pay As You Earn system. On a £28,000 salary with a 1257L code, you should pay approximately £247 a month (£2,966 annually). This is calculated as 20% on your earnings above the personal allowance (£28,000 − £12,570 = £15,430 × 20% = £3,086 per year, divided by 12).

National Insurance (NI)

A mandatory contribution of 8% on earnings between £12,570 and £50,270 annually. On a £28,000 salary, your monthly NI deduction should be approximately £103 (£1,237 annually). You stop paying NI at State Pension age.

Pension Contribution

UK law requires your employer to automatically enroll you in a workplace pension if you earn over £10,000 a year and are aged 22–66. By default, you contribute 5% of your "qualifying earnings" (your earnings between £6,240 and £50,270). On a £28,000 salary, this is approximately £92 a month. Your employer also contributes at least 3% — making your pension grow faster than just your own contribution.

Student Loan (if applicable)

If you took out a student loan to go to university, repayments are deducted automatically once you earn above the repayment threshold for your plan type. For Plan 2 (most students who started university from 2012 onwards), the threshold is £27,295. On a £28,000 salary, you pay 9% on the £705 above the threshold — approximately £5.29 a month, which rounds to £6. Repayments accelerate significantly at higher salaries.

Your first payslip at £28,000 — the complete picture

• Gross Monthly Pay: £2,333
• Less Income Tax: −£247
• Less National Insurance: −£103
• Less Pension: −£92
• Net Monthly Take-Home: approximately £1,891

This works out to about 81% of your gross monthly pay — which is a typical result for a first job in the UK at this salary level. As your salary grows and you move into the Higher Rate tax band, this percentage falls further.