If you’re like most people, your first source of income is probably your paycheck. But what exactly is a “payslip”?
A payslip is simply a document that shows how much money you’ve earned in a given period of time – typically, one week or one month. It will also show any deductions that have been made from your pay, such as taxes, health insurance, or retirement savings.
So why is it called a “payslip”? The
Why your first payslip is so important
Your first payslip may seem like just another piece of paperwork, but it’s actually an important document. Your payslip shows your gross pay (the amount you’re paid before deductions), your net pay (the amount you take home after deductions), and any deductions that have been made from your paycheck.
Deductions can include things like income tax, Social Security, and medical insurance premiums. It’s important to make sure that all of the deductions on your payslip are ones that you authorized. If you see any deductions that you don’t understand or didn’t authorize, talk to your employer right away.
Your first payslip is also a good record to keep for your own personal finances. You can use it to track your income over time and make sure that you’re being paid the correct amount. If you have any questions about your first payslip, don’t hesitate to ask your employer or a financial advisor for help.
What to do with your first payslip
For many people, getting their first payslip can be a very exciting moment. It marks the beginning of your first real job and, for some, the first time you are paid regular money.
Assuming everything is in order, your first payslip will show your salary (or wages) for the period covered by the payslip. This is normally a calendar month but could be another time period depending on your employer. If you are paid hourly, it will also show how many hours you worked during that period.
Along with your salary, you will also see any deductions that have been made from your pay. The most common deductions are taxes and social security contributions but there may also be other deductions for health insurance or other benefits.
Once you have taken all of this into account, the payslip will show your net pay, which is the amount of money that will actually be paid into your bank account (or given to you in cash).
Assuming everything is correct, there is not usually much that you need to do with your first payslip. You may want to keep it for your records but other than that, it should just be a happy reminder of your new status as a wage earner!
How to read your first payslip
This will be your first opportunity to really understand your pay and tax code. Here’s a quick guide on how to read your payslip:
Gross pay: This is the amount you will be paid before any deductions are made.
Tax: This is deducted at the basic rate of 20% from your gross pay. If you earn more than the tax-free personal allowance of £11,500 (for the 2018/19 tax year), you will also have to pay higher-rate or additional-rate tax (40% or 45%) on the amount you earn over these thresholds.
National Insurance: National Insurance contributions are charged on most types of income, including wages and salaries, pensions, and some benefits. The rate you pay depends on whether you’re classed as an employee or self-employed, and how much you earn. If you’re an employee, you currently pay 12% of your earnings between £168 and £958 a week, and 2% on earnings above this amount.
Pension: Many employers now offer a workplace pension scheme and will deduct contributions from your wages before tax is deducted. The minimum contribution level for employees is currently 5%, but this is set to rise to 8% in April 2019. Your employer will also contribute towards your pension, so it’s worth taking advantage of this benefit if your company offers it.
Net pay: This is the amount that will actually be paid into your bank account after all deductions have been made.
What your first payslip says about you
At some point in your working life, you will get your first payslip. This document tells you how much money you have earned and how much tax has been deducted from your salary.
This may seem like a lot of information to take in, but don’t worry – we’re here to help! Here’s a quick guide to what your first payslip says about you.
Your name and address: This is so your employer can identify you and make sure that they are paying the correct person.
Your National Insurance number: This is your unique NI number which is used by the government to keep track of your contributions towards things like the state pension and healthcare. You will have been given this number when you first started work.
Your tax code: This code is used by HMRC to calculate how much tax should be deducted from your salary. The code is based on things like your personal allowance (the amount of money you can earn before paying tax) and any other deductions that may apply to you.
Your pension scheme details: If you are enrolled in a workplace pension scheme, this section will show how much money is being deducted from your salary to go into your pension pot. It will also show the name of the pension provider and the scheme reference number.
How to use your first payslip to your advantage
Now that you’ve started earning your own money, it’s time to start taking control of your finances. One of the best ways to do this is to understand your payslip.
Your payslip is a document that shows how much money you’ve earned and how much has been deducted in tax and National Insurance. It’s important to check your payslip carefully so that you can make sure you’re being paid the right amount.
Once you’ve checked that everything is correct, you can start to think about how you can use your payslip to your advantage. Here are a few ideas:
- Use it to budget: knowing exactly how much money you have coming in each month will help you to work out a realistic budget. This will help you to make sure you don’t overspend and get into debt.
- Save up for something: if there’s something you really want, use your payslip to help you save up for it. Work out how much it will cost and then set aside that amount each month from your earnings.
- Invest in yourself: why not use some of your hard-earned cash to invest in your future? You could put some money towards further education or training, or even save up for a deposit on a house or flat.
Remember, your payslip is just one tool that can help you take control of your finances. For more advice on managing your money, speak to an experienced financial advisor.
What to do if you’re not happy with your first payslip
If you’re self-employed, you’ll get a payslip from each job you do. If you’re not happy with your first payslip, talk to your employer. They might be able to give you a new one.
If you’re an employee, you’ll get a payslip from your employer every time you’re paid. Your payslip will show how much money you’ve earned and any deductions that have been made, such as tax and National Insurance.
If you’re not happy with your first payslip, talk to your employer. They might be able to give you a new one.
First payslip FAQs
If you’ve just started a new job, you might be wondering when you’ll get your first payslip. Here are answers to some frequently asked questions about payslips.
When will I get my first payslip?
You should receive your first payslip on or before your first pay day.
How often will I get a payslip?
You should receive a payslip every time you’re paid. For example, if you’re paid monthly, you’ll receive 12 payslips per year.
What information will my first payslip include?
Your first payslip will include your name, address, job title, and the dates of the pay period. It will also show how much money you’ve earned and how much tax has been deducted.
Do I need to do anything with my first payslip?
You don’t need to do anything with your first payslip, but it’s a good idea to check that the information is correct. If you spot any mistakes, contact your employer as soon as possible.
First payslip templates
Once you have registered as an employer with the HMRC, you will be able to add your employees and run payroll. You can then give your employee their first payslip.
If you’re using payroll software, you’ll be able to generate payslips automatically. If you’re not using software, or if you’re a new employer, you can use HMRC’s basic PAYE tools. These include:
-a starter checklist
-a step-by-step guide
-tables to work out how much tax and National Insurance to deduct from your employee’s pay
Once you’ve worked out how much to pay your employee, you need to give them a payslip. This shows them how much they’re being paid and any deductions that have been made.