EVERYTHING YOU NEED TO KNOW ABOUT YOUR PAYSLIPADVICE FROM THE NEXT STEP

EVERYTHING YOU NEED TO KNOW ABOUT YOUR PAYSLIP.

Completing your first month of work as a newly qualified doctor or dentist is a huge achievement, a milestone marked by your first pay day.

Your earnings landing in your bank account will be accompanied by a payslip, which you may have posted to your home address or made available to you at work or online. It’s important to get hold of your payslip and understand what it outlines so you can check for any mistakes. In this article, we give a run through of the key features and common errors.

INTRODUCTION 02

NATIONAL INSURANCENational Insurance (Class 1)

contributions are deducted at source

STUDENT LOAN (IF YOU HAVE ONE)

Deducted at source

NHS PENSION SCHEMENHS Superannuation is deducted at source

NET PAYWhat you take home after all the deductions

have been taken off

INCOME TAXDeducted at source

PAYEPay As You Earn is your gross pay

PAYSLIPNO.1

03UNDERSTANDING YOUR FIRST PAYSLIP

Upon qualification, new dentists are employed by their Educational Supervisor’s practice and new doctors are employed by the local NHS trust. As employees, you’ll pay income tax under Pay As You Earn (PAYE) and will have Income Tax and National Insurance deducted at source (i.e. before your pay reaches you), as well as a student loan if you have one. You will also be automatically enrolled into the NHS pension scheme, and contributions for this will also be deducted at source.

04UNDERSTANDING YOUR FIRST PAYSLIP

You will most likely be paid monthly. In 2020/21, the basic pay (before tax, NI, student loan and pension) for DFT is £32,796 (£2,733.00 a month) and for FY1 is £28,243 (£2,353.58 a month). There are opportunities to earn more than your basic pay, especially when working at the hospital, due to how your hours fall on the rota. For example, you get a 37% uplift on your hourly rate for those worked during unsociable hours, and allowances for working weekends or on-call. The average across the rota cycle is calculated and added onto your basic pay to give your gross pay (that’s your basic pay plus any additions). More information on these additions is available in the NHS pay circular.

From your gross pay, the following deductions are made:

• National Insurance (Class 1) and Income Tax

• NHS Superannuation (your NHS pension contribution)

• Student loan repayments (if applicable)

What is left is your net pay, and this will be paid into your bank account on ‘pay day’.

By law, you must be given a payslip. All payslips follow more or less the same content, though they may vary in layout. They outline the amounts for your gross pay, net pay and each of the deductions that generate the difference, as well as providing some important references such as your payroll number and tax code.

The actual figures in your payslip may vary due to your individual circumstances, for example if you have previously been paid for work in the current tax year, perhaps as an FiY1 or working over the summer, but the below serves as a good rough guide.

05YOUR PAYSLIP EXPLAINED

DESCRIPTION

NI LETTER TAX PAID NON-TAXABLE PAYTAX PERIOD

GROSS PAY TAXABLE PAY TAXABLE PAYPENSIONABLE PAY

NI PAY OTHER NI PAY PREVIOUS TAXABLE PAY TOTAL PAYMENTSFREQUENCY

NI CONTS OTHER NI CONTS PREVIOUS TAX PAID TOTAL DEDUCTIONSPERIOD END DATE

PENSIONABLE PAY PENSION CONTS PAY DATE

NO REF NUMBER EMPLOYEE NO. PAY METHOD

DESCRIPTION

DEDUCTIONS(R INDICATES REFUND)PAY AND ALLOWANCES (*= MINUS AMOUNT)

PAID/DUE RATE AMOUNT AMOUNT BALANCE C/F

NI NUMBERTAX CODETAX OFFICE REFTAX OFFICE NAME

WG / WAGE INC DATE STANDARD HOURS PT SAL/WAGE

PAYSCALE DESCRIPTION

40 28243.00

Foundation Doctor Year 1Foundation Year 1Paediatrics

28243.00

1250L CUMUL AB123456C123/AB5678Cambridge University Hos.

DR T N STEP Addenbrooke’s Hospital12345678JOB TITLEDEPARTMENT

LOCATIONEMPLOYEE NAMEASSIGNMENT NUMBER

WRK/EARNED

Basic Pay 173.81 173.81 13.5411 2353.58

Addn Roster Hours NP 22.00 22.00 13.5411 297.90

Night duty 37% 24.00 8.88 13.5411 120.24

Weekend <1in4-1in5 141.21

NI A 254.55

NHS Pension 9.3% 218.88

Doctors Mess 20.00

PAYE 330.47

Student loan 62.90

5825.86

5825.86 5388.10

0.00

0.00

0.00

437.76

2353.58

6

Monthly

This Period SummaryYear To Date Balances (This Employment Only)

30 MAY 2021

2694.05

0.00

2912.93

886.60

27 MAY 2021

BACSNET PAY 2,026.13

A

509.10

4707.16

Assignment number This number is unique to you and enables your employer and payroll department to identify you.

WageThis is your basic salary for the year, and is set against your job title and payscale. You’ll want to check that these are correct, especially if as you progress through training or move between hospitals or trusts.

Standard hoursThis is the number of hours you work per week for your basic pay. If you are in a less than full time position, this will be less than 40. You may well work above your 40 hours per week, for which you are paid above your basic pay.

Tax codeHM Revenue & Customs (HMRC) will send you your tax code. The code tells your employer how much tax-free pay you should get before deducting tax from the rest, called your personal allowance. This is set at £12,500 for this tax year. This can be adjusted – it is increased when you claim tax relief on expenses, and reduced when you pay tax on a benefit in kind, such as private medical insurance if provided by your employer. If the code is wrong, you could end up paying too much or too little tax, so you should check this against your latest tax code letter. The letter L in England (S in Scotland or C in Wales) means that this personal allowance is being taken into account. W1/M1/X/0T mean that the personal allowance is not being taken into account, called ‘emergency tax codes’ and you could be paying more tax than you should be. This is easily rectified through your employer’s payroll or by contacting HMRC. If you have been in employment in this tax year you will need to give your employer your P45, which will show how much tax you have paid and your tax code. If you have not been in employment in this tax year, your Education Supervisor will ask you to fill in form P46, which will generate a new tax code that matches your circumstances.

National Insurance (NI) number You must have a NI number to work in the UK. You have the same NI number throughout your whole life – even if you change your name. It’s your personal identifier for the whole of the social security system and is used to make sure all your contributions are recorded properly. These are important as they help to build up your entitlement to state benefits and pension.

PaymentsThis section shows how much you have earned in wages before any deductions are made. It could also show any extra payments you have earned, through uplifts and allowances in England and banding in the rest of the UK. Examples here are given for England. Additional

rostered hours are overtime within sociable hours (7am – 9pm in England), given here at an average of 22 hours this month, paid at the usual rate. Unsociable hours are paid at 137% of your hourly rate, so the basic rate is paid within your basic pay or additional rostered hours, and the additional 37% paid within night duty, which is why the figure in the paid/due column is 37% of the figure in the worked/earned column. A weekend allowance shown here is for an average of between 1 in 4 and 1 in 5 across the rota cycle, with a monthly payment of £141.21 giving an annual total of £1,695. In Wales, Scotland and Northern Ireland, your banding payments would show here instead of these allowances and uplifts. Your employer might also pay any expenses owed to you via the payroll, which would appear in this column.

DeductionsYour payslip must show the amount of variable deductions, such as tax (called PAYE here) and National Insurance (NI A). Your pension contribution will also be shown (which is not subject to tax), and if you’re making repayments on a student loan, this will be shown on your payslip as well. If you’ve signed up to make contributions to the Doctors Mess, this will come out of your payslip here. You’ll normally start making student loan repayments from the April following the date you graduate or leave your course. HMRC will tell your employer how to work out and deduct the right amount.

Totals year to date and period summaryYour payslip will give totals for the pay period in questions and running totals for the financial year on pensions contributions, taxable pay and National Insurance contributions etc. A financial year runs from 6 April to 5 April.

Pay DateThis is the date your pay should be credited to your bank account.

Net payWhat’s left - for most of us this is the most important figure on the payslip! This is the amount that will be paid into your bank account once all deductions have been made. You should check this figure against your bank statement to make sure it matches what is paid in.

06

Hint!Finally, make sure your employer gives you a P60 at the end of the tax year (5th April each year). This is a record of your pay and the tax you’ve paid that tax year, which must be given to you by 31st May. You will also receive a P45 at the end of your employment, for example at the end of your DFT year. Keep both these forms safe as you will need to them in the future, for example when you start your next job or become self-employed as an Associate. You can also log in to HMRC online using a Government Gateway login to check these figures through the year.

HERE’S WHAT IT MEANS

07

1. SECURITY

Payslips contain a lot of personal information about you and your earnings, including your National Insurance number. Keep them safe to help avoid them being used for identity fraud.

2. RECORD KEEPING

It’s a good idea to keep a record of all your earnings and tax payments in case there’s a problem and you need to check old details.

3. EVIDENCE OF EARNINGS

For some financial products, such as loans and mortgages, you might be asked to prove your earnings by showing your last three payslips.

A FEW REASONS TO KEEP YOUR PAYSLIPS IN A SAFE PLACE

WESLEYAN’S THE NEXT STEP HELPS PREPARE FINAL YEAR MEDICAL AND DENTAL STUDENTS FOR WORKING LIFE AND MAKE THE TRANSITION BETWEEN UNIVERSITY ANDYOUR FOUNDATION TRAINING A LITTLE EASIER. For more information and access to more resources like this, visit The Next Step Student Hub. We’re sharing insights and information over on our Instagram and Facebook channels too, including details about our upcoming events.

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