What Should I Include in a Payslip in England and Wales?

When you pay your employees and workers for the work they have carried out, it is not as straightforward as making a payment. You are also legally required to detail information about the pay you are giving them and any deductions you might take from this. This should be in the form of a payslip. It is essential that you understand precisely when you are required to do this and what information a payslip should contain. If your employee or worker feels that there is a mistake on their payslip which you have not sorted out, they could raise it as a complaint with you. If you still fail to sort it out, they may make a claim at an employment tribunal. This article will explain what pay information you should include on a payslip. 

What is a Payslip?

A payslip is a summary of a worker’s pay and their deductions. It provides evidence of their:

• gross pay;
• tax; and 
• any pension contributions.

Payslips are also called wage slips or itemised pay statements. They can be in print format, electronic format as an email attachment or provided for online. For example, an employee or worker can log in and view or download their payslips. As an employer, it is up to you to choose which method suits you. However, employers typically produce them by using a form of payroll software.

It is not common for printed payslips to be issued anymore. This results from the increase in digital paper processing, and because they contain sensitive, confidential personal information. Payslips are more likely to go astray into the wrong hands if provided for in paper format.

When Should an Employer Provide Staff With a Payslip?

It is a legal requirement to provide a payslip. This applies to your employees and workers. A worker can include, for example:

• staff who are on zero-hour contracts, where your worker does not have to accept the work you offer them, and you are not obliged to offer a minimum number of hours of work; or
•  agency workers where you provide the payslip to them through their agency. 

You should provide your employee or worker with their payslip either before you pay their salary or on the same day. It is good practice to give the payslip beforehand as it allows you time to sort out any questions or errors on the payslip. If you do not work out errors on your employee or worker’s payslip, they might raise a formal complaint as a grievance against you. If you fail to sort it out at this stage, they may make a claim at an employment tribunal.

As an employer, you are not required to provide staff with a payslip where they are a:

• contractor or a freelancer;
• merchant sea person; or
• member of a crew working in share fishing, or the master where their pay is a part of the gross earnings or profits of the fishing vessel.

What Details Should Be on a Payslip?

As an employer, you must detail specific information on your staff’s payslips, including:

• hours worked;
• gross pay, which is the earnings before you make any deductions;
• net pay, which is the earnings after you make any deductions; 
• variable deductions, which can include any tax deducted, National Insurance deducted, student loan and pension deductions; and 
• ‘variable hours’ where your employee or worker’s work hours vary between pay periods such as overtime or an increase in hours at different rates for particular work hours.

You can also include any fixed amount deductions, such as when your employee pays you back for their season ticket or a trade union subscription. However, you do not need to include these in the payslip. Instead, you can include it as a separate written statement. If you have it as the latter, you must update the written statement annually, and your employee should get it before they receive their first payslip. It must detail the deduction, how much it is and the frequency with which you pay it.

There are other details a payslip could include, but that are not required, such as, for example:

• the period the pay relates to;
• the employee or worker’s payroll number;
• any expenses owed to your employee or worker; or
• your employee or worker’s tax code.

Key Takeaways

Paying your staff is a crucial obligation in employment, and you will set up the amount of pay in your employee’s or worker’s contract. It is essential to get employees’ pay correct. This includes any necessary deductions you might need to make from this. You are legally required to provide your employee and workers with a payslip detailing this type of information. For example, you should describe their gross salary, net salary, and deductions such as tax and national insurance. You may also wish to detail other things, such as their tax code.

If you need help understanding what to include in a payslip in England and Wales, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.

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