Payslip Jargon Buster — Every Payroll Term Explained
Payslips are full of abbreviations, codes, and terms that most people were never taught to understand. PAYE, NI, EE, ER, YTD, BR, AEO — it can look like a different language. This jargon buster explains every term you’re likely to see on a UK payslip in plain English.
The key terms
| Term | What it means |
|---|---|
| PAYE | Pay As You Earn. The system your employer uses to collect Income Tax and National Insurance on behalf of HMRC. Tax is deducted directly from your pay before you receive it. |
| Gross Pay | Your total earnings before any deductions. This is the headline salary figure — not what you take home. |
| Net Pay | Your take-home pay after all deductions have been applied. This is the amount paid into your bank account. |
| NI / NIC | National Insurance Contributions. Payments that fund the State Pension, NHS, and benefits like Statutory Sick Pay and Maternity Pay. In 2026/27 the employee rate is 8% on earnings between £12,570 and £50,270. |
| EE | Employee. Used to label contributions or deductions paid by the employee — for example “Pension EE” is your pension contribution. |
| ER | Employer. Used to label contributions made by your employer — for example “Pension ER” is your employer’s pension contribution. This does not come off your pay. |
| YTD | Year-to-Date. The running total of your pay, tax, NI, and other figures since the start of the tax year (6 April). Your final YTD figures should match your P60. |
| Tax Code | A code from HMRC (usually 1257L) that tells your employer how much of your income is tax-free. The number × 10 = your personal allowance. The letter shows the type of allowance. |
| Personal Allowance | The amount you can earn before paying income tax. £12,570 in 2026/27 for most employees. |
| SL / SLR | Student Loan / Student Loan Repayment. Automatically deducted once you earn above your plan’s repayment threshold. |
| BR | Basic Rate. A tax code meaning all income from this job is taxed at 20% with no personal allowance. Common for second jobs. If it appears on your main job, contact HMRC — you may be overpaying. |
| 0T | Zero T. A tax code meaning no personal allowance. Applied when you start a new job without a P45 and your employer doesn’t have your tax details yet. |
| W1 / M1 | Week 1 / Month 1. An emergency tax code suffix meaning tax is calculated on each pay period in isolation rather than cumulatively. Can result in overpaying. Should be updated once HMRC has your details. |
| K Code | A tax code where a figure is added to your taxable income rather than deducted. Usually means you have a company car benefit or significant underpaid tax. E.g. K500 adds £5,000 to your taxable income. |
| SSP | Statutory Sick Pay. Paid by your employer when you’re off sick. From April 2026, all employees are eligible regardless of how much they earn. |
| SMP | Statutory Maternity Pay. Paid for up to 39 weeks. The first 6 weeks are at 90% of average weekly earnings; weeks 7–39 at the statutory rate (£194.32/week in 2026/27). |
| SPP | Statutory Paternity Pay. Paid for up to 2 weeks at the statutory rate (£194.32/week in 2026/27). |
| BACS | Bankers’ Automated Clearing Services. The electronic system used to transfer pay into your bank account. Usually takes up to 3 working days. |
| AEO | Attachment of Earnings Order. A court-ordered deduction from your pay — for example to repay a debt or child maintenance. Your employer is legally required to apply it. |
| CSA / CMS | Child Support Agency / Child Maintenance Service. Deductions for child maintenance, administered through payroll when ordered. |
| Salary Sacrifice | An arrangement where you give up part of your gross salary in exchange for a non-cash benefit (e.g. pension, cycle-to-work scheme, electric car). Reduces your taxable income and NI liability. |
| Taxable Pay | Your gross pay minus any tax-free deductions (such as salary sacrifice pension contributions). Income tax is calculated on this figure, not your full gross pay. |
| Period Number | Which pay period this payslip covers. Period 1 = April, period 12 = March (for monthly pay). Used to track cumulative totals through the tax year. |
| PAYE Reference | Your employer’s unique HMRC identifier, shown in the format 123/AB456. You need this when contacting HMRC about your tax or claiming a refund. |
Student loan plan thresholds 2026/27
If your payslip shows a student loan deduction and you’re not sure which plan you’re on, here’s a quick reference:
| Plan | Who it applies to | Threshold 2026/27 | Rate |
|---|---|---|---|
| Plan 1 | Pre-2012 England/Wales; all NI | £26,900 | 9% |
| Plan 2 | Post-2012 England/Wales | £29,385 | 9% |
| Plan 5 | England, started uni Sept 2023+ | £25,000 | 9% |
| Plan 4 | Scotland | £31,395 | 9% |
| Postgraduate | Postgraduate loans | £21,000 | 6% |
Check your payslip figures
Use the free OS Payroll salary calculator to check your income tax and NI figures against your payslip. Enter your gross salary and tax code and compare the results.
Frequently asked questions
What does PAYE mean on my payslip?
PAYE stands for Pay As You Earn. It’s the system HMRC uses to collect income tax and National Insurance directly from your wages through your employer, before you receive your pay.
What is the difference between EE and ER on a payslip?
EE means Employee — it’s the contribution you make. ER means Employer — it’s the contribution your employer makes. You’ll see these most often with pension contributions: “Pension EE” comes off your pay, “Pension ER” does not.
What does YTD mean on a payslip?
YTD stands for Year-to-Date. It shows the running cumulative total of your pay, tax, and NI since the start of the tax year on 6 April. Your final YTD figures at the end of March should match the totals on your P60.
Why does my payslip say BR?
BR means all your income from this employment is taxed at the basic rate (20%) with no personal allowance. This is common for second jobs. If you see BR on your main job, contact HMRC — you may be overpaying tax.
What is salary sacrifice on a payslip?
Salary sacrifice is where you give up part of your gross salary in exchange for a benefit — most commonly a workplace pension or a cycle-to-work scheme. Because the sacrifice comes off before tax is calculated, you pay less income tax and NI on the reduced salary.
What does AEO mean on a payslip?
AEO stands for Attachment of Earnings Order. It’s a court-ordered deduction from your pay — often used to recover debts or enforce child maintenance payments. Your employer is legally required to apply it.
This post is for general information only and does not constitute financial or tax advice.