Understanding UK Payslips, Tax Codes and P60s: Student Guide
A plain-English breakdown of UK payslips, tax codes and the P60, so international student workers can check they're being paid and taxed correctly.
If you've taken a part-time job during your studies, your first UK payslip can look like a wall of unfamiliar abbreviations. Understanding it matters — it's how you check you're not being overtaxed, which is common for students working irregular hours.
Reading your payslip line by line
Every UK payslip must legally show:
- Gross pay — your earnings before any deductions
- Tax code — determines how much Income Tax is deducted
- Income Tax deducted — calculated under PAYE (Pay As You Earn)
- National Insurance (NI) contributions — a separate deduction funding NHS and state benefits
- Net pay — what actually lands in your bank account
Your net pay is transferred directly to whichever UK bank account you've given your employer — another reason to have a proper current account like the ones compared in our Monzo vs Starling vs Revolut guide set up before you start work.
Decoding your tax code
The most common tax code, 1257L, means you can earn £12,570 in the current tax year before paying any Income Tax at all. The letters and numbers matter:
- 1257 roughly represents your tax-free Personal Allowance divided by 10
- L means you're entitled to the standard tax-free allowance
- BR means all your income from that job is taxed at the basic rate (20%), often applied incorrectly to a first job or a second job — worth checking
New employees, especially those starting mid-year without a P45 from a previous UK job, are frequently placed on an emergency tax code (often shown as "W1" or "M1"). This can mean paying too much tax initially — it's usually refunded automatically once HMRC updates your record, but you can also claim it back directly.
The P60 and why you'll need it
At the end of each tax year (5 April), your employer issues a P60, summarising your total pay and tax deducted for that year. Keep every P60 you receive — you may need it:
- To prove income for a visa extension or the Graduate Route application
- To claim back overpaid tax from HMRC
- As proof of earnings if you apply for credit or a larger tenancy in future
Checking you're not overpaying
- Confirm your tax code with HMRC directly via your personal tax account on gov.uk — it takes minutes to check online.
- If you've had more than one job in the same tax year, make sure only one employer is applying your full Personal Allowance.
- If you spot "BR", "0T" or an emergency code and you only have one job, contact HMRC or your payroll department to correct it.
- At the end of the tax year, use HMRC's tools to check if you're due a refund — many students working part-time under the 20-hour visa limit are.
Tax codes are separate from your visa conditions. Make sure your total hours stay within your Student visa's 20-hour weekly work rule regardless of how your pay is taxed.
Setting up for your first payslip
Before your first day, your employer will typically ask for your National Insurance number (apply early — see our NI number guide) and your UK bank details. Make sure both are sorted well before payday to avoid delays.
Understanding your payslip is one part of financial literacy in the UK — pair it with a realistic monthly budget using our Oxford cost of living guide, and consider how consistent income affects your UK credit score over time.
If navigating employment paperwork alongside your studies feels overwhelming, Arrive UK's Career Hub offers guidance on part-time work, payslips and building a UK-ready CV for international students.
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