Gross pay is everything you earn in a pay period before anything is taken off: basic salary, overtime, bonus and allowances. Net pay is what is left after deductions, the figure that actually reaches your bank. Section 8 of the Employment Rights Act 1996 requires your payslip to show both, plus every deduction in between, so you can see exactly where the gap goes.
What sits between gross and net?
The usual deductions on a UK payslip, top to bottom:
- Income tax (PAYE): your tax code applied against the 2025/26 bands above your £12,570 Personal Allowance.
- National Insurance: 8% on monthly earnings between £1,048 and £4,189 for Category A, then 2% above.
- Pension: auto-enrolment minimum 5% of qualifying earnings, deducted before or after tax depending on the scheme.
- Student loan: a percentage of pay above your plan threshold, where applicable.
Why are pension deductions worth a second look?
The order matters for your tax. A salary-sacrifice or net-pay pension comes out of gross before income tax is worked out, so your taxable pay, and your tax, fall. A relief-at-source pension comes out after tax, with HMRC topping up the relief into the pension. Same headline 5%, different effect on net pay. This is why two people on identical salaries can take home different amounts.
How do I check my net pay is right?
Work top down: confirm gross matches your contract and hours, then check each deduction against the rules, income tax bands, NI thresholds and your pension rate. Net pay should equal gross minus the lot, and must match the credit in your account on payday. If it does not reconcile, the cause is usually a wrong tax code or NI category. The full walkthrough is in how to read a UK payslip.
Primary sources
- Employment Rights Act 1996, Section 8 — legislation.gov.uk — Statutory right to an itemised pay statement showing gross, deductions and net
- Income Tax rates and Personal Allowances — gov.uk — 2025/26 PAYE bands applied to gross pay
- National Insurance rates and categories — gov.uk — Employee NI deducted from gross pay
- Repaying your student loan — gov.uk — Student loan deductions by plan
Editorial process: how we source and review UK tax content.