Why Is My Take-Home Pay Different Each Month?

Your net (take-home) pay may vary from month to month for several reasons, including:

• Changes to your tax code
• National Insurance deductions
• Pension contributions
• Overtime payments
• Bonuses or commission
• Unpaid leave
• Statutory payments (e.g. SSP, SMP)
• Student loan deductions

If you are unsure about a change in your pay, please review your payslip first, as it provides a full breakdown of payments and deductions.

What Does My Tax Code Mean?

Your tax code determines how much Income Tax is deducted from your pay. It shows how much tax-free income you are entitled to in the tax year.

Tax codes are issued and updated by HM Revenue & Customs (HMRC), not by your employer.

For more information, visit:

 Tax codes: Why your tax code might change - GOV.UK

Why Has My Tax Code Changed?

HMRC may update your tax code due to:

• Starting or leaving a job
• Having more than one job
• Receiving taxable benefits (e.g. company car, medical insurance)
• Underpaid or overpaid tax from a previous year
• New information provided to HMRC

If you believe your tax code is incorrect, you must contact HMRC directly.

When Will I Be Paid?

Pay dates are determined by your contract of employment. Employees are typically paid:

• Monthly on a fixed date, or
• Weekly on an agreed day

Please refer to your contract or contact Payroll if you are unsure of your pay schedule.

What Is PAYE?

PAYE (Pay As You Earn) is HMRC’s system for collecting Income Tax and National Insurance directly from your wages before you are paid.

Your employer deducts these amounts and sends them to HMRC on your behalf.

For more information, visit:

Income Tax: introduction: How you pay Income Tax - GOV.UK
 

What Is National Insurance and Why Do I Pay It?

National Insurance (NI) contributions help fund:

• The State Pension
• The NHS
• Statutory payments (e.g. maternity, sick pay)
• Certain state benefits

The amount you pay depends on your earnings and NI category.

Why Are Pension Contributions Taken From My Pay?

Under automatic enrolment legislation, eligible employees must be enrolled into a workplace pension scheme.

Contributions are deducted from your pay, and your employer also makes contributions on your behalf.

For more information, visit:

Automatic enrolment: An explanation of the automatic enrolment process
 

Can I opt out of the Pension Scheme?

Yes. Although enrolment is a legal requirement for eligible employees, you may choose to opt out.

Opt-out requests must be made directly with the pension provider — not through Payroll. Full details of the opt-out process are provided by the pension provider after enrolment.

Please consider the long-term implications before opting out.

What Is Shown on My Payslip?

Your payslip provides a detailed breakdown of:

Payments, such as:

• Basic pay
• Overtime
• Bonuses or commission
• Statutory payments

Deductions, such as:

• Income Tax
• National Insurance
• Pension contributions
• Student loan repayments
• Other authorised deductions

If you have questions about your payslip, please contact Payroll.

Why Have I Paid Emergency Tax?

Emergency tax is usually applied when Payroll has not yet received your correct tax code from HMRC.

This commonly occurs when:

• You start a new job without a P45
• HMRC has not yet processed updated information

Once HMRC issues the correct tax code, any overpaid tax is normally refunded automatically through payroll.

For more information, visit:

Tax codes: Emergency tax codes - GOV.UK
 

What Happens If I Am Off Sick?

You may be entitled to Statutory Sick Pay (SSP), subject to eligibility criteria and the length of absence.

Eligibility and payment rates are set by the government and may change each tax year.

For more information, visit:
Statutory Sick Pay (SSP) : Overview - GOV.UK (Tax Year 2025–2026)

How Is Holiday Entitlement and Pay Calculated?

Statutory holiday entitlement is typically 28 days per year (including bank holidays) for full-time employees, calculated on a pro-rata basis for part-time staff.

Holiday pay is calculated based on your average earnings over the previous 52 paid weeks.

For more information, visit:

How to calculate holiday entitlement - Calculate holiday entitlement - GOV.UK

Holiday entitlement-  Holiday entitlement: Holiday pay - GOV.UK

What Happens When I Leave Employment?

When you leave the company, you will receive:

• Your final salary payment
• Payment for any accrued but untaken holiday (if applicable)
• A P45 showing your pay and tax to date

Your P45 should be provided to your new employer to ensure the correct tax code is applied.

For more information, visit:

P45, P60 and P11D forms: workers' guide: P45 - GOV.UK