Demystifying payslips for employees

27 March 2020

All employers have a duty to ensure that, when paying their employees, they provide a payslip detailing that pay. Issuing a payslip is one thing but should employers be doing more to explain a payslip? It may be a surprise to some employers but the number of employees who do not review their payslips is extremely high. Also, regarding those employees who do review the payslip, do they understand what it means? Often they do not and remain in the dark or they subsequently raise questions with their employers, taking up valuable time all round.

So, what can employers do to help and what are the benefits? Some suggestions are set out below.

Provide a simple guide to the meaning of payslip entries

Offering a simple to understand guide, explaining the breakdown of a payslip, will arm an employee with a better understanding of what a payslip means. It will also enable individuals to assess the reasonableness of their net pay. This knowledge should reduce the number of queries for employers’ Payroll/HR teams to resolve.

Emphasise the importance of checking a payslip

As well as explaining what the various entries on a payslip mean, it is just as important to emphasise why employees should be interested in checking payslips.  It acts as a further control to determine if matters such as tax codes, allowances and deductions have been applied correctly. If they have not, addressing any errors early benefits all parties.

Use electronic payslips

Using electronic payslips means that employees have all their payslip records held securely in one place, making it easy to check and also to compare them between pay periods. Moreover, the use of electronic payslips is an environmentally friendlier option. Over the last few years, many employers have switched away from hard copies for these reasons. 

RSM’s payslip portal delivers electronic payslips to clients’ employees, securely and efficiently and feedback from clients demonstrates that employees welcome being able to access their payslip history whenever it suits them.

If you want to know more about the level detail we can provide on payslips or are interested in the benefits of using electronic payslips, please contact Simon Balaam.