Your first salary — reading a payslip end-to-end | Ages 16–18 guide

Age band: 16–18+
Reading time: 9–11 min read
Topic: Payslips & take-home pay
UK relevance: UK-wide
Tax year: 2026/27
Last reviewed: 2026-05-11

What this guide covers

A UK payslip has six things you need to understand: gross pay, tax code, Income Tax, National Insurance, pension and net pay. Get the tax code wrong and you can be hundreds of pounds out of pocket. Read your first payslip the day it arrives and check the tax code box.

①The six lines on every UK payslip

Every legal UK payslip must show your gross pay, deductions, net pay, and your tax code. Most also show year-to-date totals and pension contributions. Here's the anatomy:

Line	What it is	Typical for a £24,000 starter
Gross pay	Total before any deductions	£2,000.00 / month
Tax code	How much tax-free allowance HMRC says you get	1257L (standard)
Income Tax (PAYE)	20% of taxable income (income above £12,570 in 2026/27)	£190.83 / month
National Insurance	8% of pay above £12,570 (2026/27 employee Class 1 rate)	£76.33 / month
Pension (if enrolled)	Usually 5% employee + 3% employer minimum auto-enrolment	£71.43 / month (5% on band)
Net pay	What lands in your bank account	£1,661.41 / month

Gross to net for a £24k salary in 2026/27, with full auto-enrolment pension: roughly 83p in every £1 reaches your bank account. The other 17p is tax, NI and pension.

②Decoding your tax code

Your tax code is a short string of digits and letters. It tells your employer how much you can earn tax-free each year.

1257L — standard. The 1257 means £12,570 tax-free a year. The L means standard personal allowance. Most 18-year-olds in their first job will see this.
BR — every penny taxed at 20% from £1. Usually applied to a second job, but can also be applied wrongly to a first job.
0T — no tax-free allowance. Often used when HMRC has no information about you yet.
D0 — every penny taxed at 40%. Almost always a second job for high earners.
1257L W1/M1 (or "X") — "emergency" code. Treats each pay period in isolation. You're probably paying too much tax.
K-codes — you have a tax liability bigger than your allowance, usually because of a company car benefit. Rare for under-25s.

Watch for this. If your first payslip shows code BR, 0T, or anything ending W1/M1/X, you're probably on emergency tax. You'll get the money back automatically — but it can take months. Phone HMRC on 0300 200 3300 or log into the HMRC app to get your code corrected sooner.

③P45, P60, P11D — the three forms

You'll meet three pieces of paperwork in your first few years of work. Hang on to all of them — pension applications, mortgage applications, and tax queries 5 years from now all rely on them.

P45. Given to you when you leave a job. Three parts: one for you, one for HMRC, one for your new employer. Hand the new-employer part to your next job within a month and your tax code follows you.
P60. Given by your employer at the end of every tax year (early April). One-page summary: total pay, total tax, total NI. Keep it for at least 4 years.
P11D. Given if you receive benefits in kind (private healthcare, company car, certain expenses). Rare for entry-level jobs. You'll know if you get one.

④Setting up your HMRC personal tax account

Take 15 minutes to set up your personal tax account at gov.uk/personal-tax-account. With it you can:

Check your tax code and ask for it to be changed.
Claim back overpaid tax without forms.
Track your NI record (this matters for your State Pension later).
See pension scheme entitlement.
Tell HMRC you've changed jobs, address or marriage status.

National Insurance number. If you're not sure what yours is, log into your tax account or check old payslips. You'll need it for every job, every pension, every benefit claim, and every Self Assessment for the rest of your life.

⑤Five things to check on your first payslip

Tax code. Should be 1257L unless you have a second job. If not, contact HMRC immediately.
Gross pay. Should match your contract, divided by 12 for monthly or by 52 for weekly.
Pension line. If you're over 22 and earning more than £10,000 a year, you should be auto-enrolled. Don't opt out — see the pension guide.
NI category letter. Should be A for most people. Different letters apply to apprentices under 25 (H), under-21s (M), some women (B/C/E).
Net pay matches what lands in your bank. If it doesn't, ring payroll the same day.

NCNational Curriculum links

England — PSHE Association KS4 L17 (financial responsibility), L18 (financial planning)
England — Citizenship KS4 (taxation, public services)
England — Maths KS4 (percentages, financial calculations)
Wales — Curriculum for Wales Progression Step 5 (HWB, Maths & Numeracy)
Scotland — Curriculum for Excellence MNU 4-09a, HWB 4-21a
NI — LLW KS4 Personal Finance, Citizenship

Full mapping in the curriculum map.

Cite this guide
UK Tax Drag (2026). Your first salary — reading a payslip end-to-end. Ages 16–18 deep guide. Available at: https://kids.uktaxdrag.co.uk/ages-16-18-your-first-salary.html
Curriculum mapping: see UK Financial Education Curriculum Map (Version 1.0).

Not financial advice. This guide explains how the UK system works for educational purposes. Always check current rates and rules at gov.uk and consider talking to a qualified adviser before making real financial decisions, especially before age 18.