UK Payroll & HR Glossary
Clear definitions of the payroll and HR terms UK employers and employees deal with — from PAYE and National Insurance to P60s, tax codes and pension auto-enrolment.
PAYE
Pay As You Earn — the system UK employers use to deduct Income Tax and National Insurance from wages and pay them to HMRC.
National Insurance
National Insurance is a UK tax on earnings paid by employees and employers that builds entitlement to the state pension; each employee has a category letter that sets the rate.
P60
A certificate showing an employee's total pay and the tax deducted over the UK tax year.
P45
The form an employer gives an employee when they leave, showing pay and tax to date.
Tax code
A code (e.g. 1257L) that tells the employer how much tax-free income an employee is entitled to under PAYE.
National Minimum Wage
The National Minimum Wage is the lowest hourly pay UK law lets an employer pay; from April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour.
Pension auto-enrolment
Pension auto-enrolment is the UK law that requires every employer to automatically put eligible workers into a workplace pension and pay contributions into it.
Statutory Sick Pay
Statutory Sick Pay (SSP) is the legal minimum an eligible UK employee gets when too ill to work: up to £123.25 a week in 2026/27, for up to 28 weeks.
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