Key Stage: KS3
Year group: Year 7 / Year 8
Age range: 11–13
Duration: 50 minutes
Subject: Maths / PSHE / Citizenship
Cost: Free

Learning aim

Pupils can identify the four key parts of a UK payslip (gross pay, deductions, net pay, year-to-date totals) and explain what each one shows.

CURRICULUM National Curriculum links

PSHE Association KS3 L24: about the role money plays in their own and others' lives
PSHE Association KS3 L26: about how to manage money safely and how to budget
Maths KS3: calculate percentages of amounts in financial contexts
Citizenship KS3: the functions and uses of money

RESOURCES What you'll need

Sample anonymised payslip handout (£1,800/month gross example)
Highlighter pens (4 colours per pupil)
Mini-whiteboards + pens
Worksheet: Decode the payslip
Calculator (optional)

LESSON Lesson structure (50 minutes)

Opening
HOOK

Display an unlabelled payslip on the board. Ask: "If you got this with your first wages, what would you look at first?" Take 3-4 suggestions — most will say "how much did I get". Then reveal the headline gross figure (e.g. £1,800) and the net figure beneath (e.g. £1,500). Ask: "Why are these different? Where did £300 go?"

Direct teach
TEACH

Walk through a real-style payslip section by section. Build the language: Gross pay (the headline figure before anything is taken), PAYE / Income Tax (the slice going to government to fund schools, NHS, roads), National Insurance (a separate tax that funds State Pension + NHS), Pension contribution (if auto-enrolled), Student loan (after university), Net pay (what reaches the bank), Year-to-date (running totals across the tax year, April-April). Use a £1,800/month example throughout.

Pupils apply
GUIDED

Pupils work in pairs with a sample payslip and four highlighters. Highlight: green = gross, red = deductions, blue = net pay, yellow = year-to-date totals. After highlighting, they complete the "Decode the payslip" worksheet — for each labelled section, write what it shows in their own words.

Stretch / depth
CHALLENGE

Display: "Sarah's gross pay is £2,000/month. Her tax is £190 and NI is £76. What's her net pay?" Pupils calculate £1,734. Then a tougher one: "Sarah's friend Ben earns £1,500/month gross. His tax is £90 and NI is £36. Why is Ben's tax so much lower than Sarah's?" Discuss: the first £12,570/year of pay is tax-free (Personal Allowance), so Ben has less above the threshold. Build the idea that tax is based on income above an allowance, not on every pound earned.

Close
PLENARY

Each pupil writes one sentence on their mini-whiteboard: "On a payslip, the most important number to look at is ___ because ___." Share three answers. Final question: "If you start a Saturday job, what figure should you check on your payslip first — gross or net?" (Net — that's what you actually receive.)

DIFFERENTIATION Adapting for all learners

Support (working below ARE)

Use only the £1,800/month example with pre-labelled sections. Pupils explain in their own words what each labelled section shows rather than identifying themselves. Provide a vocabulary card with pictures.

Stretch (working above ARE)

Calculate the missing deduction when given gross and net (e.g. gross £2,000, net £1,600 — what's deducted in total?). Then: "If Sarah gets a £1,000 pay rise, will her take-home pay increase by £1,000? Why or why not?" Discuss marginal rates.

SEND SEND adaptations

For pupils with dyscalculia: use round numbers only (£2,000/month, £200 tax, £100 NI) and provide a calculator. For pupils with autism: provide a structured step-by-step decoder card listing each section in order. For visually impaired pupils: use enlarged payslip handouts with high contrast.

EAL EAL support

Pre-teach vocabulary with images: "gross", "net", "deduction", "PAYE", "tax", "NI", "pension", "year-to-date". Display each word with its plain-English equivalent. Sentence frame: "The gross pay is ___. After deductions of ___, the net pay is ___."

ASSESSMENT Assessment criteria

Pupils can: (1) identify gross, net and at least one deduction on a payslip; (2) explain in one sentence why net is less than gross; (3) calculate net pay given gross and total deductions for a worked example. Exit ticket: one quick calculation on a mini-whiteboard.

HOME Homework pack

Four activities to confidently read a UK payslip. ~30 minutes.

Payslip glossary

What pupils do: Define these 6 payslip terms in plain English: Gross pay, Net pay, Tax code, Income tax, NI, Pension contribution.

Expected output: A 6-row vocabulary table.

Marking guidance: 1 mark per definition. 6 marks total.

Reverse engineering

What pupils do: A payslip shows: Gross £2,000, Tax code 1257L, Income tax £190, NI £80, Pension £60. Calculate the net pay. Show working.

Expected output: A net pay calculation.

Marking guidance: 2 marks for correct method, 2 marks for £1,670 net.

Payslip red flags

What pupils do: Write 3 things to check on every payslip. For each, explain what to do if it's wrong.

Expected output: A 3-row "check and act" table.

Marking guidance: 2 marks per check + action. 6 marks total. (Examples: tax code matches HMRC; hours match contract; pension contribution at agreed rate.)

Extension (optional)

What pupils do: Find a real (or sample) payslip online. Annotate it with arrows showing: gross pay, tax code, income tax line, NI line, pension line, net pay. Add 1 question you would ask payroll if anything looked odd.

Expected output: An annotated payslip image with a question.

Marking guidance: Up to 6 marks for accurate annotation and a thoughtful question.

Family discussion prompt (safeguarding-aware)

Ask a working adult: "What's the first thing you check on your payslip each month?"

SAFEGUARDING Classroom safeguarding

Note for teachers: Use only fictional names and amounts. Do not ask pupils about their family's wages, parents' jobs, or whether their family struggles financially. If a pupil mentions family financial difficulties, accept neutrally and follow safeguarding procedure outside the lesson.

ANSWERS Answer key & differentiation

Answer guide

Hook: the £300 gap is deductions — income tax, National Insurance and (often) a pension contribution.
Challenge: Sarah's net pay = £2,000 − £190 − £76 = £1,734. Ben's tax is lower because the £12,570 Personal Allowance covers a bigger share of his £1,500 — tax only applies to income above the allowance.
Plenary: net pay is the figure to check first — it is what actually arrives in the bank.
Homework "Reverse engineering": £2,000 − £190 − £80 − £60 = £1,670 net. "Red flags" model answers: tax code matches your HMRC coding notice; hours and rate match your contract; pension line matches the agreed percentage — and query anything odd with payroll in writing.
Differentiation stretch answers: gross £2,000 with net £1,600 means £400 of total deductions; a £1,000 rise never adds £1,000 to take-home because tax and NI take their marginal slice.

Support (scaffold)

Pin the four-colour legend to the top of the payslip before highlighting begins.
Teach one shape: gross − deductions = net, drawn as a three-box diagram pupils fill for every example.
Count the deduction lines first, then read the numbers — separates structure from arithmetic.

Stretch (challenge)

Build a payslip from scratch for £21,000 a year (£1,750 gross a month): estimate roughly £140 income tax and £56 NI using the monthly thresholds, then label every line.
Trace year-to-date totals across three consecutive payslips starting in April — what should each YTD figure do, and what would a payroll error look like?
Draft the two-line email to payroll for a suspected wrong deduction: what evidence goes in it?

What is income tax — and why we pay it (KS3 · Year 7 / Year 8)
National Insurance — what it is, who pays it (KS3 · Year 8)
Tax codes and emergency tax — decoding the letters and numbers (KS3 · Year 8 / Year 9)
All lesson plans (KS1 · KS2 · KS3 · KS4) →