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Most people look at two numbers on their payslip: gross salary and net pay. Everything in between is a mystery. But those deductions aren't random — they're structured, regulated, and in many cases, you have some control over them. Understanding what's on your payslip is the first step to making better decisions about your salary.
South Africa: How to Read Your IRP5 Payslip
A South African payslip typically shows the following sections:
| Line Item | What It Is | Who Controls It |
|---|---|---|
| Basic Salary | Your agreed monthly gross salary | Employment contract |
| Travel Allowance | Car allowance — 80% is taxable if no logbook | Employer/employee negotiation |
| Bonus / 13th Cheque | Taxable in the month received — often causes tax spike | Employment contract |
| Medical Aid | Your contribution deducted pre-tax | Your medical scheme choice |
| Pension / Provident Fund | Deductible up to 27.5% of income | Your retirement fund choice |
| UIF | 1% of salary (capped at R177.12/month) | Statutory — fixed |
| PAYE | Income tax deducted monthly by employer | SARS tables — affected by your deductions |
| SDL | Skills Development Levy (employer pays, not you) | Statutory — employer cost |
| Net Pay | What hits your bank account | Result of all above |
The most important thing to check: your tax code and the PAYE amount. If your employer has set up your deductions incorrectly — for example, not factoring in your medical aid credits or retirement fund contributions — you could be overpaying PAYE monthly. This is more common than people realise and results in a tax refund at year-end, but it means you've given SARS an interest-free loan for months.
United Kingdom: How to Read Your UK Payslip
UK payslips are governed by HMRC and must show:
| Line Item | What It Is | Key Number (2025–26) |
|---|---|---|
| Gross Pay | Total earnings before deductions | Your agreed salary |
| Income Tax (PAYE) | Tax deducted via tax code (usually 1257L) | 20% basic / 40% higher rate |
| National Insurance (NI) | Employee NI contribution | 8% on £12,570–£50,270 / 2% above |
| Student Loan | Repayment if applicable | 9% above threshold (Plan dependent) |
| Pension | Auto-enrolment / salary sacrifice contribution | Minimum 5% employee |
| Taxable Pay | Gross minus tax-free allowances | Gross minus £12,570 personal allowance |
| Net Pay | Take-home after all deductions | The number that matters |
Your tax code matters. If your payslip shows an emergency tax code (W1, M1, or 0T) instead of 1257L, you're being overtaxed. Contact your employer's payroll team immediately — you can reclaim the overpayment via HMRC or your employer. Emergency codes are common when starting a new job or after a payroll error.
USA: How to Read Your Pay Stub
American pay stubs are among the most detailed — but also the most confusing for newcomers:
| Line Item | What It Is | 2025 Rate |
|---|---|---|
| Gross Wages | Total earnings before deductions | Your agreed salary |
| Federal Income Tax | Withheld based on W-4 elections | 10–37% marginal |
| Social Security Tax | FICA — retirement and disability | 6.2% up to $176,100 |
| Medicare Tax | FICA — healthcare | 1.45% (+ 0.9% above $200k) |
| State Income Tax | Varies by state (0% in TX, FL, NV) | 0–13.3% |
| 401(k) / 403(b) | Pre-tax retirement deduction | Up to $23,500/year |
| Health Insurance Premium | Employee share of employer plan | Varies by employer |
| FSA / HSA | Pre-tax health savings account | Up to $3,300 (FSA) |
| Net Pay | Direct deposit amount | YTD total also shown |
Check your W-4 annually. If you consistently get a large tax refund, you're over-withholding — you've given the IRS an interest-free loan. If you owe tax every April, you're under-withholding. Adjust your W-4 elections to match your actual tax liability more closely.
Australia: How to Read Your Australian Payslip
| Line Item | What It Is | 2025–26 Rate |
|---|---|---|
| Ordinary Hours Pay | Base salary for standard hours | Your agreed rate |
| Income Tax (PAYG) | Tax withheld using ATO tax tables | Progressive 0–45% |
| Medicare Levy | Funds the public health system | 2% of taxable income |
| Superannuation | Employer pays — shown separately | 12% of ordinary earnings |
| HECS/HELP Repayment | Student loan deduction if applicable | 1–10% above threshold |
| Salary Sacrifice | Pre-tax super or benefits contributions | Your election |
| Net Pay | Amount deposited to your account | Gross minus all deductions |
Super is on top — not out of. Your payslip should show super as an employer contribution separate from your gross pay, not deducted from it. If super is being deducted from your take-home pay rather than paid on top, something is wrong with your employment arrangement.
Three Things to Check on Every Payslip
1. Year-to-date (YTD) figures. Your payslip should show cumulative totals for the financial year. Use these to verify you're on track with annual deductions and to catch any errors early.
2. Pension/retirement contributions. Confirm both your contribution and your employer's contribution are being made correctly. Errors here affect your retirement savings and your tax deduction.
3. Any changes from last month. If a deduction appears or disappears without explanation, ask payroll. Common causes: medical aid changes, loan repayments starting, or payroll system errors.
Frequently Asked Questions
PAYE (Pay As You Earn) is income tax deducted monthly by your employer on behalf of SARS. The amount is calculated using SARS tax tables applied to your taxable income (gross salary minus deductible contributions like pension and medical aid). At year-end, SARS reconciles this against your actual tax liability via your tax return.
Your tax code tells your employer how much income tax to deduct. 1257L is the standard code for the 2025–26 tax year, meaning you have a £12,570 personal allowance. W1, M1, or 0T codes indicate emergency/incorrect coding — contact HMRC or your employer. Codes with 'K' prefix mean you have taxable benefits exceeding your allowance.
Several reasons: overtime or additional hours, a bonus being paid, backdated pay increase, commission, or an expense reimbursement. Taxable allowances (travel, medical) also add to gross. Compare to your employment contract and ask payroll if any addition is unclear.
Gross pay is your total earnings before any deductions. Net pay (take-home pay) is what's deposited in your bank account after income tax, pension contributions, social security/NI/UIF, medical aid, and any other deductions. The gap between gross and net is often 20–35% depending on your income and country.
Contact your employer's payroll department in writing (email creates a record). State specifically what you believe is incorrect and provide the relevant figures. If the error results in underpayment, your employer must correct it — legally in all major jurisdictions. If PAYE has been over-deducted, this usually resolves via your annual tax return.
Use SARS eFiling's tax calculator to estimate your annual tax liability, then divide by 12. Compare this to the monthly PAYE on your payslip. If your payslip PAYE is significantly higher than the estimate, your employer may not be applying all your deductions correctly. Bring your payslip and deduction details to a registered tax practitioner for review.
→ Use our Salary After Tax Calculator to verify your expected take-home pay matches what's on your payslip.