What Should I Include in a Payslip in the UK?

When you pay your employees and workers for the work they have carried out, it is not as straightforward as making a payment. You must also clearly detail the pay you are giving your employees and any deductions you plan to take from it. This should be in the form of a payslip. Furthermore, you must know exactly when to issue a payslip and what information it should contain. If your employee or worker feels that there is a mistake on their payslip that 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 the deductions from their pay. It provides evidence of their:

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

Payslips detail this for a specific pay period. For example, if you pay your staff weekly, their payslip will show the relevant information for that week.

Payslips are also called wage slips or itemised pay statements. They can be in print format, electronic format as an email attachment or provided 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 payroll software.

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 in line with your internal policy. If you fail to sort it out at this stage, they may make a claim at an employment tribunal for unlawful deduction from wages, failure to provide an itemised pay statement, or breach of contract.

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 by shares in the gross earnings or profits of the fishing vessel.

The Legal Position Regarding Electronic Payslips 

Electronic payslips are becoming increasingly common, but the Employment Rights Act 1996 does not specifically address whether they comply with the legislation. Simply making payslips available on a portal may not sufficiently meet the obligation to “give” employees their pay statements. A cautious approach involves emailing employees monthly to confirm payment and either:

1. attaching the payslip as an electronic document, or
2. informing them that their payslip is ready to view via a portal, providing a direct link.

Employers should have contingency plans for technical problems to avoid breaching their legal obligations.

By following these guidelines, employers can help ensure they meet their legal obligations while benefiting from the convenience of electronic payslips.

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.

When recording variable hours in your employee or worker’s pay, you can either show the total amount or show a breakdown of the variable hours. The latter approach is more helpful to your employee or worker, as you can record their standard hours as a single block and list any overtime hours separately.

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 receive it before 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.

What Are the Potential Remedies Available to Workers?

Workers have several options if their payslip rights are violated. Itemised payslips are crucial evidence in claims for unlawful deductions, which can be brought while still employed.

If an employer makes deductions without clearly setting them out on a payslip, the employee may be awarded compensation. Repeated failures to provide proper payslips may also give an employee grounds to resign and claim ‘constructive dismissal’, as this could amount to a serious breach of the employment contract.

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Key Takeaways

Paying your staff is a crucial obligation in employment, and you will establish the pay in your employee’s contract. It is essential to get the employees’ pay correct. This includes any necessary deductions you might need to make from this. You are legally required to provide your employees 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. Call us today on 0808 196 8584 or visit our membership page.

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