Income

Common Payslip Mistakes and How to Fix Them

#Why Payslip Accuracy Matters

Your payslip is a critical document that shows how your salary is calculated, including deductions for tax, National Insurance, pensions, and more. Mistakes on your payslip can mean you’re either underpaid or overpaying taxes, so it’s essential to spot and correct them quickly.

#Common Payslip Mistakes

  1. Incorrect Tax Code:

    • One of the most frequent issues is having the wrong tax code. This can lead to paying too much or too little tax.
    • How to Fix: If you think your tax code is wrong, you can use the Check your Income Tax online service to:
      • Update your employment details
      • Tell HMRC about a change in income that may have affected your tax code
      • Add company benefits
      • Add missing employers or income
      • Claim employment expenses
      • Update your estimated taxable income
    • HMRC may change your tax code as a result of the updates you make in the online service. You can find this service on the official HMRC website.**
    • One of the most frequent issues is having the wrong tax code. This can lead to paying too much or too little tax.
    • How to Fix: Check your tax code against your personal allowance and income. Contact HMRC if you believe it’s incorrect.

  2. Wrong National Insurance Contributions:

    • Sometimes, your NI category might be incorrect, leading to overpayment or underpayment.
    • How to Fix: Verify your NI category on your payslip and compare it to your employment status. Notify your payroll department if there’s a discrepancy.

  3. Missing Overtime or Bonuses:

    • If you’ve worked extra hours or received a bonus, it should be clearly shown on your payslip.
    • How to Fix: Gather evidence of your work hours or bonus entitlement and raise the issue with your employer.

  4. Pension Contribution Errors:

    • Your chosen contribution rate might not be correctly applied, or employer contributions might be missing.
    • How to Fix: Check your pension contribution rate and verify it matches your chosen amount. Speak to your HR or payroll team if it doesn’t add up.

  5. Incorrect Salary Sacrifice Deductions:

    • Sometimes salary sacrifice arrangements, like pension contributions or other benefits, are not correctly reflected.
    • How to Fix: Compare your payslip with your agreed salary sacrifice arrangement and flag any inconsistencies with your employer.

  6. Student Loan Repayment Errors:

    • Deductions may be applied incorrectly if your earnings are below the threshold or the wrong plan is used.
    • How to Fix: Check your repayment plan and income threshold, then contact the Student Loans Company if you spot a mistake.

  7. Deductions for Benefits You Don’t Use:

    • Sometimes, deductions are made for benefits you haven’t signed up for.
    • How to Fix: Review your benefits package and report any unauthorized deductions to HR.

#Steps to Take When You Spot a Mistake

  1. Review Your Payslip: Compare it to your previous payslips and your employment contract.
  2. Gather Evidence: Collect any supporting documents, such as timesheets, bonus agreements, or previous payslips.
  3. Contact Payroll: Raise the issue as soon as possible. Be clear and provide all relevant details.
  4. Follow Up: Ensure the mistake is corrected on the next payslip and that any discrepancies are rectified.

#Preventing Future Errors

  • Regularly Check Your Payslip: Make it a habit to review your payslip each month.
  • Keep Records: Save copies of your payslips and employment agreements.
  • Communicate with HR: Stay informed about any changes to your salary or deductions.

Spotting errors early can save you a lot of hassle. By knowing the common mistakes and how to address them, you can protect your earnings and ensure your payslip accurately reflects your hard work.