Every employer in the UK has a legal obligation to provide employees and workers with an itemised payslip. It’s set out in section 8 of the Employment Rights Act 1996, and there’s no exemption for small businesses, startups, or employers who think they’re too busy. If you pay someone, they get a payslip. Miss one, get it wrong, or leave something off, and you’re exposed to an employment tribunal claim.
Since April 2019, this right extends beyond employees to all workers, including zero hours staff, casual workers, and agency workers. The only people not entitled to payslips are genuinely self employed individuals. If someone’s working for you and you’re deducting tax through PAYE, they need a payslip.
What a payslip must contain
The Employment Rights Act specifies five categories of information that must appear on every payslip. These are not optional extras or best practice suggestions. They are legal requirements.
1. Gross pay. The total amount of wages or salary before any deductions. This is the starting point for everything else on the payslip. It includes basic pay, overtime, commission, bonuses, and any other payment that forms part of the employee’s earnings for that period.
2. Variable deductions (itemised individually). Every deduction that changes from one pay period to the next must be listed separately with its amount and the reason for it. Income Tax (PAYE), employee National Insurance contributions, student loan repayments, attachment of earnings orders, and pension contributions from auto enrolment all fall into this category. The payslip must show each one as a distinct line. Lumping them together as ‘deductions’ is not compliant.
3. Fixed deductions. These are deductions that stay the same each pay period, such as a fixed trade union subscription or a regular salary sacrifice amount. Employers have two options here: either list each fixed deduction individually on every payslip, or provide the employee with a separate standing statement of fixed deductions (updated at least every 12 months) and show only the aggregate total on the payslip.
4. Net pay. The actual amount the employee receives after all deductions have been taken. This is the take home figure.
5. Method of payment. If different parts of the net pay are paid in different ways (for example, part by bank transfer and part in cash), the payslip must show the amount and method of each part payment.
The hours requirement (from April 2019)
Since 6 April 2019, payslips must also show the number of hours worked where pay varies depending on how much time the employee has worked. This applies to anyone on an hourly rate, zero hours contract, or variable shift pattern where pay fluctuates with hours. The hours can be shown as a single total or broken down (for example, 30 normal hours plus 5 overtime hours). If the employee is on a fixed salary that doesn’t vary with hours, this requirement doesn’t apply.
This change was introduced specifically to support National Minimum Wage enforcement. If an employee’s payslip shows their hours and their pay, it becomes much easier to check whether they’re being paid at or above the legal minimum. HMRC’s NMW compliance officers use payslip data as a primary source when investigating underpayment claims.
When payslips must be provided
The law is clear: payslips must be given at or before the time the payment is made. Not the day after. Not at the end of the week. On or before payday. For most employers running monthly payroll, that means the payslip should be available to the employee on their pay date. For weekly payroll, it’s every week.
There is no prescribed format. Payslips can be paper or electronic. Many employers now use online portals or email delivery, which is perfectly lawful as long as the employee can access and retain a copy. The key test is whether the payslip is genuinely accessible to the worker before or on payday.
What doesn’t have to be on a payslip (but probably should be)
The law specifies the minimum. In practice, most payroll systems include additional information that helps both the employer and the employee. Tax codes, National Insurance numbers, employee names, employer names, pay period dates, and year to date figures for pay, tax, and NIC are all commonly included but not strictly required by the Employment Rights Act.
That said, including them is strongly recommended. A payslip that shows the employee’s tax code makes it much easier to spot HMRC coding errors before they become a problem. Year to date figures help employees check their P60 at year end. And showing the pay period dates removes any ambiguity about what the payslip covers. When you use a bureau that provides outsourced payroll, all of this detail is included as standard.
Rolled up holiday pay on payslips
Since April 2024, employers can lawfully use rolled up holiday pay for irregular hours and part year workers. If you’re doing this, the holiday pay element must be shown as a separate, clearly identified line on the payslip. Simply increasing the hourly rate by 12.07% without showing it separately doesn’t meet the legal requirement. The employee needs to see that their holiday pay has been included and how much it was.
What happens if you get it wrong
An employee or worker can bring a claim to an employment tribunal if they haven’t received a payslip, or if the payslip doesn’t contain the required information. The tribunal can make a declaration confirming what should have been included and, if the employer also made an unnotified deduction from wages in the previous 13 weeks, can order the employer to pay compensation equal to the total of those unnotified deductions.
Defective payslips also create practical problems during National Minimum Wage and PAYE checks. Employers must keep reliable payroll evidence, and annual-leave records now have a six-year retention requirement. The Fair Work Agency began operating in April 2026, but its holiday-pay and SSP enforcement powers are being introduced in later phases.
Common payslip mistakes
The most frequent error is not itemising deductions individually. Showing ‘Total deductions: £450’ instead of listing PAYE, NIC, pension, and student loan separately is a breach. The second most common issue is not showing hours for variable pay workers, which became mandatory in 2019 but is still missed by many smaller employers. Other mistakes include issuing payslips late (after payday), not updating the standing statement of fixed deductions annually, and not showing rolled up holiday pay as a separate line.
Payslip compliance is not complicated, but it does require a payroll system that generates the correct information in the correct format every time. For businesses across Hull, Beverley, and East Yorkshire, outsourcing to a specialist bureau means every payslip meets the legal standard without you having to think about it. Check our outsourced payroll pricing or contact us to discuss your requirements.
Recent Comments