Do you check your payslip each month? If the answer’s no, you’re not alone. According to research by Intuit QuickBooks, a third of UK workers don’t check their payslips regularly. Here’s why your payslip matters and how checking your earnings each month can improve your overall financial health.
What is a payslip?
Your payslip tells you how much money you’ve earned in the last pay period. It gives you a breakdown of your:
- Gross pay: your pre-tax earnings
- Net pay: how much you clear after paying tax
- Tax code: the code that determines how much tax you pay
- Pension contributions: any contributions you or your employer makes to your workplace pension
Payslips are typically received monthly, but some are workers receive theirs weekly or quarterly. Ideally, you should keep your payslips for at least 22 months just in case you need to double-check them or show them to HMRC for tax reporting purposes.
By law, your employer must give you a payslip. If you don’t receive one, or your employer won’t give you one, talk to HR or ask Acas for help.
Why should you check your payslip?
Well, there are two main reasons.
Firstly, if you’re on the wrong tax code, you might be paying more (or less) tax than you should be. If you pay too much tax, you’re losing out on a portion of your net pay. On the other hand, if you underpay tax, you’ll need to repay this money over a set period, which could affect your finances in the long term.
Secondly, if there’s an error on your wage slip, such as the wrong National Insurance number, you could lose your entitlement to benefits. Your State Pension entitlement may also be affected.
So, if you don’t check your wage slips regularly, you risk missing out on key information that affects your finances.
How can a payslip help you take control of your money?
According to the research from QuickBooks, 41% of British workers plan on spending cautiously after the Covid pandemic. So, if you plan on taking control of your finances, here’s a summary of how your payslip can help:
- If you want to apply for credit, such as a mortgage or a personal loan, payslips act as proof of income. Keeping payslips handy can make the application process smoother.
- Payslips can make it easier to file a tax return if you use HMRC’s Self-Assessment option.
- By keeping an eye on exactly what you earn each month, it’s easier to budget and make plans for the future.
A payslip helps you track your monthly income, so if you want to get a handle on your finances, you need to check them.
Do you have your last payslip handy? Check it over now and make sure it’s right. If it’s not, query any issues with HR. Otherwise, you could be paying more tax than you should be. And remember, if your employer won’t give you a payslip, you can contact an association like Acas or even Citizens Advice for support.
Looking for more ways to take control of your finances? You might want to start by opening a savings account. Check out our list top-rated savings accounts available right now.
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