PAYE Basics

What Is PAYE on a Payslip? Meaning and How It Works (2026/27)

1 November 2026 · 5 min read

Written and reviewed by the AfterTaxSalary team · Updated for 2026/27 · Editorial standards · Methodology

PAYE on a payslip means Pay As You Earn: the income tax your employer takes from your pay and sends to HMRC. This guide shows how the figure is worked out for 2026/27, why it changes, and what to do if it looks wrong.

Contents ▾
  1. 1. Key facts
  2. 2. How is PAYE worked out?
  3. 3. Why does PAYE change from month to month?
  4. 4. Why is there no PAYE on my payslip?
  5. 5. What to do if your PAYE looks wrong

Quick answer (2026/27)

PAYE on a payslip stands for Pay As You Earn. It is normally the income tax your employer has taken from your pay and passed to HMRC1. The amount depends on your pay and your tax code2. On code 1257L and £2,500 a month it is £290.50 for 2026/27. National Insurance is usually shown as a separate line.

How much PAYE will I see on my payslip?

PAYE line on a monthly payslip by salary, 2026/27, England, Wales and Northern Ireland. Source: GOV.UK: Income Tax rates and Personal Allowances
SalaryGross a monthPAYE (income tax)Employee NINet pay
£15,000£1,250.00£40.50£16.20£1,193.30
£25,000£2,083.33£207.17£82.87£1,793.30
£35,000£2,916.67£373.83£149.53£2,393.30
£50,000£4,166.67£623.83£249.53£3,293.30
£60,000£5,000.00£952.67£267.55£3,779.78
£80,000£6,666.67£1,619.33£300.88£4,746.45

Tax code 1257L, category A, no pension or student loan, steady pay. Our calculator works in exact twelfths, so a real payslip can differ by pence.

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Who this guide helps

  • Employees comparing calculator results with a payslip
  • People checking why net pay changed without a salary change
  • Job movers who need a clear baseline before comparing offers

What this guide covers

  1. Key facts
  2. How is PAYE worked out?
  3. Why does PAYE change from month to month?
  4. Why is there no PAYE on my payslip?
  5. What to do if your PAYE looks wrong

At-a-glance examples (2026/27)

Typical default outputs for quick context.

Gross salaryNet monthlyNet annualOpen
£25,000 £1,793.30 £21,519.60 View page
£35,000 £2,393.30 £28,719.60 View page
£50,000 £3,293.30 £39,519.60 View page

Key facts

  • PAYE stands for Pay As You Earn. It is HMRC's system for collecting Income Tax and National Insurance from employment1.
  • A line marked PAYE on a payslip is normally your income tax. National Insurance is usually a separate line, often NI or EE NI.
  • Your tax code tells your employer how much to take off23.
  • For 2026/27 the first £12,570 is tax-free on the standard code 1257L. Above that, rates are 20%, 40% and 45% in England, Wales and Northern Ireland4.
  • Your employer reports your pay and deductions to HMRC on or before each payday1.

How is PAYE worked out?

PAYE is cumulative. Each payday, payroll adds up your taxable pay since 6 April, takes off your tax-free pay for the year so far, works out the tax due to date and deducts whatever has not been paid yet.

For steady pay under the higher-rate threshold you can check it with one sum: (monthly gross minus £1,047.50) × 20%.

  • £2,500 a month: (£2,500 minus £1,047.50) × 20% = £290.50 PAYE.
  • £3,000 a month: (£3,000 minus £1,047.50) × 20% = £390.50 PAYE.

Why does PAYE change from month to month?

  • Your pay changed: overtime, a bonus or fewer hours all feed into the tax to date.
  • Your tax code changed: HMRC sends your employer a new code and payroll applies it from then on.
  • You earned less earlier in the tax year: a cumulative code can give back tax in a low-paid month, so PAYE can be small or even a refund.
  • You started a new job: an emergency code (1257L W1, M1 or X) ignores your pay so far this tax year3.
  • A pension changed: salary sacrifice and net pay pensions come off before tax, so a change to your contribution changes the tax.

Why is there no PAYE on my payslip?

If your pay to date is below your tax-free pay to date, no income tax is due, so the line can be blank or £0. On code 1257L that means under £1,047.50 a month with steady pay. National Insurance is worked out separately, for each pay period.

What to do if your PAYE looks wrong

This page is general information for employees, not personal tax advice. Figures are estimates for 2026/27.

  • Check the tax code against your HMRC online account6.
  • Add up your year-to-date pay and tax, then try the free check on the tax check page or the payslip calculator.
  • Ask payroll about your pay, hours and pension. Only HMRC can change your tax code.

Related pages on this site

Use the calculator for practical scenarios

Baseline £35,000 (England) £50,000 in Scotland £75,000 in England Compare two offers Target a £3,000 monthly net £25,000 salary page (England) £35,000 salary page (England) £50,000 salary page (England) City comparison pages

2026/27 factual reference points

Current tax-year thresholds used across this guide and calculator.

NI thresholds

  • Primary threshold: £12,570
  • Upper earnings limit: £50,270
  • Rates: 8% then 2%

Student loan plans

  • PLAN1: threshold £26,900, rate 9%
  • PLAN2: threshold £29,385, rate 9%
  • PLAN4: threshold £33,795, rate 9%
  • PLAN5: threshold £25,000, rate 9%
  • Postgraduate: threshold £21,000, rate 6%

Frequently asked questions

What does PAYE mean on a payslip?+

Pay As You Earn. The line shows the income tax your employer has taken from this pay and will send to HMRC.

Is PAYE the same as income tax?+

Not quite. PAYE is the system, and income tax is the tax. HMRC describes PAYE as its system for collecting Income Tax and National Insurance from employment, but a PAYE line on a payslip normally shows income tax alone.

Is National Insurance included in PAYE on my payslip?+

Usually not. Most payslips show National Insurance on its own line. If yours has one line for both, ask payroll for the split.

How much PAYE should I pay on £30,000?+

About £290.50 a month, or £3,486 a year, in 2026/27 on code 1257L with no pension. National Insurance is separate, at about £116.20 a month.

Do I pay PAYE if I am self-employed?+

No. PAYE is for employment income and pensions. Self-employed people normally pay through Self Assessment.

Can I test this guide topic in the calculator?+

Yes. Use the scenario links in this guide to open prefilled states, then adjust salary, region, loan and pension settings.

Related guides

10 min read
How to Read Your Payslip (Pay Stub): Every Line Explained, UK 2026/27
7 min read
Payslip Abbreviations and Codes Explained: PAYE, NI Letter, YTD, SL, SSP and More
9 min read
Tax Code 1257L Explained: What It Means and When It Is Wrong (2026/27)

Sources & references

Official

The rates, thresholds and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC or GOV.UK page in a new tab.

  1. PAYE and payroll for employers www.gov.uk/paye-for-employers
  2. Income Tax: how you pay it www.gov.uk/income-tax/how-you-pay-income-tax
  3. Tax codes: what they mean www.gov.uk/tax-codes
  4. Income Tax rates and Personal Allowances www.gov.uk/income-tax-rates
  5. Payslips: your rights and what they must show www.gov.uk/payslips
  6. Check your Income Tax for the current year www.gov.uk/check-income-tax-current-year
  7. National Insurance rates and categories www.gov.uk/national-insurance-rates-letters

Verified against published UK government guidance for 2026/27.