As April 2026 approaches, payroll end of year (PYE) pressure is likely setting in.

With tight deadlines and cumbersome administrative processes, it’s no wonder that completing the payroll year is often a difficult task.

What if this year could be different?

To help you minimize the end-of-year 2026 payroll stress, we’ve put together five practical tips.

First tip: understand key dates

When it comes to surviving the end of the pay year, knowing the key dates is half the battle, as missing them can result in penalties.

Here are the most important dates to mark in your calendar and set reminders for:

• April 5: the end of the tax year – all payroll files from the previous year must be finalized by this date
• April 6: the new tax year begins – your payroll software needs to be updated and new tax codes and thresholds applied
• On or before your employees’ payday: send your final Full Payment Submission (FPS) payroll report for the year
• Before April 19: the final legal deadline for submitting the year-end FPS and any Employer Payment Summary (EPS) report for the fiscal year just ended
• Before May 31: the deadline for giving your current employees their P60
• Before July 6: report employee expenses and benefits by submitting forms P11D and P11D(b) if not processed through payroll
• Before July 19: pay class 1A NIC on P11D benefits by post
• Before July 22: pay class 1A NIC on P11D benefits electronically

Add these dates to your calendar, set reminders, or scribble them on a post-it note – whatever works for you, just make sure they stick in mind!

Second tip: format your data

Accurate data forms the basis for a smooth payroll year-end.

Mistakes now become headaches later.

Before processing your final payroll, take the time to review your employee records and your cumulative totals.

Next, determine if there have been any changes in your workforce over the past year, such as:

• New recruits
• The leavers
• Benefit adjustments

If your record keeping has been consistent, this step should be simple.

But if you’re using spreadsheets or juggling data across multiple systems, things can get tricky.

Tips for reviewing your data

If you’re not sure where to start when it comes to reviewing the quality of your data, here are some questions to help guide your data review:

• Do you still have any former employees registered?
• Have all deductions been processed?
• Have all non-salary benefits been included and calculated?

Trick : use HMRC recognized payroll software to streamline your data management: the right system can handle calculations, keep accurate records and ensure compliance, saving you time and reducing the risk of errors.

Tip Three: Submit your final FPS and EPS carefully

Do not rush this step.

Your Final Full Payment Submission (FPS) and Employer Payment Summary (EPS) are critical steps in the PYE process.

These submissions provide HMRC with the latest information for the tax year, so it is essential to get them right the first time.

Errors can be difficult to correct later, so double-check everything before clicking “submit.”

Tip #4: Stay informed of legislative changes

Payroll laws are constantly evolving and staying informed is essential to avoiding penalties and ensuring compliance.

The government website is a reliable resource for legislative updates, but payroll software providers can also make your life easier; for example, vendors, like IRIS, automatically update their systems to reflect the latest changes, helping you stay compliant without manual effort.

Trick : look for webinars from reputable providers, covering key legislative updates and offering practical advice.

Tip Five: Master the Basics

Sometimes the best strategy is to go back to basics.

Make sure you’ve covered these essentials:

• Staff details: Are all employee records accurate and up to date?
• Payment details: have you correctly reported the pay of all employees?
• Final pay cycle: process your last paycheck by April 5, 2026 and check your employees’ cumulative figures
• The leavers: Have you processed leavers to ensure their information is recorded in the correct tax year?
• Additional pay weeks: If you make weekly pay, you may need to make additional pay
• Final submission: Submit your final FPS or EPS to finalize the fiscal year figures
• P60: distribute P60 to all employees

Ready to tackle 2026 end-of-year payroll?

The end of the payroll year doesn’t have to be a source of stress.

With preparation, you can navigate PYE with confidence and ease.

Looking for more advice? Download our Payroll 2026 End of Year Survival Guide for more tips and expert advice.

As a leader, your single most important job isn’t having all the answers. It’s making sure your team knows what’s expected of them. When you fail to set clear expectations, you’re not just creating confusion; you’re actively setting your people up to fail. And that’s a fast track to chaos, missed deadlines and a revolving door of talent.

Unspoken expectations are just premeditated disappointments. You have a picture in your head of what “good” looks like, but if you don’t share it, how can anyone else possibly see it? They’re left guessing, second-guessing and trying to read your mind. It’s exhausting for them and frustrating for you.

This is your playbook for getting it right. We’re going to show you how to swap vague instructions for crystal-clear outcomes, turn confusion into alignment and build a high-performing team that knows exactly how to win.

Why setting clear expectations isn’t just a task, it’s your job

Setting expectations is the absolute foundation of effective leadership. It’s not a box-ticking exercise you do once and forget about. It’s the daily work of building trust, eliminating guesswork and creating the psychological safety your team needs to do their best work.

Many leaders shy away from being direct because they confuse clarity with micromanagement. They’re not the same thing. 

Micromanagement is telling people how to do their job. Setting clear expectations is about defining ‘what success looks like’ and then empowering them to figure out ‘the how’. It’s the difference between being a centralised decision-maker and being a guide. By providing a clear destination, you give your team the freedom and autonomy to navigate the journey. That’s not control; it’s empowerment.

This fundamental leadership skill is the bedrock of high-performing teams, but its absence can create hidden costs that quietly drain your business. So, here are 11 tips on setting employee expectations the right way.

1. The hidden costs of unclear expectations

Vague expectations are a quiet drain on your business. They create friction, waste and frustration that slowly grinds your team to a halt. When people don’t know what’s expected of them, the damage is real and quantifiable.

You see it in the wasted hours spent on rework because the first attempt missed the mark. You feel it in the plummeting morale when people feel like they can never win, no matter how hard they try. You notice it when your most engaged employees start to pull back, stop offering ideas and do just enough to get by. And you definitely feel it when your most talented people walk out the door, tired of the constant guessing games.

This isn’t just a “people problem”, it’s a performance problem. It’s a recipe for chaos that directly impacts your bottom line. Getting clear on expectations isn’t just a nice-to-have; it’s a business necessity.

The first step to fixing this is to get brutally clear on what you actually want your team to achieve.

2. How to define what ‘done’ looks like

“Can you sort this out for me?” is not an expectation. It’s a hospital pass. Stop assuming people know what you mean by “done”. You need to move from delegating tasks to defining outcomes. It’s a subtle but powerful shift.

The best way to do this is by using the SMART framework. It’s a classic for a reason—it works. It forces you to get specific and create a shared, unambiguous picture of the end goal.

• Specific: What exactly needs to be accomplished? Instead of “Improve our social media,” try “Increase our LinkedIn followers.”
• Measurable: How will you know when it’s done? “Increase our LinkedIn followers by 15%.”
• Achievable: Is this realistic given the resources and timeframe?
• Relevant: How does this connect to the bigger picture? Does it support the team’s and the company’s goals?
• Time-bound: When does this need to be completed? “Increase our LinkedIn followers by 15% by the end of Q3.”

Using this model eliminates ambiguity and ensures everyone is aiming for the same target. Once you know what ‘done’ looks like, you need to clarify who is responsible for getting it there.

3. End the confusion: Clarify roles with the RACI model

“I thought you were doing that!” is a phrase that should strike fear into any leader’s heart. It signals a complete breakdown in role clarity. The RACI model is a powerful, no-nonsense tool for making sure this never happens again.

It forces you to map out who does what, preventing tasks from being dropped and stopping people from stepping on each other’s toes. Here’s how it works:

• Responsible: The person (or people) who actually does the work. They are the ‘doers’.
• Accountable: The one person who is ultimately answerable for the work getting done correctly. This is the owner and there can only be one.
• Consulted: The experts who need to provide input or feedback before the work is done. This is a two-way conversation.
• Informed: The stakeholders who need to be kept up-to-date on progress but don’t need to be directly involved. This is a one-way communication.

Mapping this out for every major project or initiative is a game-changer. It provides a single source of truth for who is involved and in what capacity, bringing order to potential chaos.

Knowing what needs to be done and who needs to do it is crucial, but it’s not enough to inspire great work.

4. The power of ‘why’: Communicating purpose, not just tasks

People don’t pour their hearts into a to-do list. They pour their hearts into a mission. If you want your team to be truly motivated, you need to connect their work to a bigger purpose. Explain the ‘why’ behind the ‘what’.

Instead of just saying, “We need to hit our sales target,” explain why it matters. “Hitting our sales target this quarter means we can invest in the new product feature our customers have been asking for, which will help us serve them better.”

This simple shift in communication transforms a mundane task into a meaningful contribution. It helps your team see how their individual effort fits into the company’s goals and the value you provide to your customers. A sense of purpose is the ultimate performance-enhancing drug. It’s a core component of building a great company culture and demonstrating empathetic, effective leadership.

With the ‘why’ established, the timing of your conversation becomes critical.

5. Set expectations early to prevent chaos later

The best time to set expectations is right at the very start. The worst time is when a project is already off the rails. Being proactive here will save you a world of pain.

For any new project, role or initiative, your first step should be a dedicated kick-off meeting to establish alignment. Get everyone in a room (virtual or physical) and agree on the goals, roles (using RACI), timeline and what ‘done’ looks like.

This proactive approach prevents the massive waste of time, energy and morale that comes from having to course correct midway through a project. An hour spent on alignment at the beginning can save you weeks of rework and frustration later.

As you set these expectations, it’s also vital to consider the people who will be delivering on them.

6. How to align expectations with your team’s strengths

Great leaders don’t try to force a square peg into a round hole. They understand the unique talents of each person on their team and set expectations that play to those strengths.

Take the time to understand what each team member excels at and what they enjoy doing. Is one person a brilliant problem-solver but a less effective communicator? Assign them the complex technical task, not the client presentation. Is another a natural relationship-builder? Give them the responsibility of managing stakeholder communications.

When you assign tasks that leverage individual strengths, you get two massive benefits: better results and higher engagement. People are more motivated and effective when they are doing work they are good at and find rewarding.

Setting expectations is just the beginning; the real work happens in the follow-up.

7. The importance of check-ins and non-stop feedback

Setting expectations is not a “set it and forget it” activity. It’s a continuous conversation. You don’t just point the ship in a direction and hope for the best; you need to keep steering.

Regular, informal check-ins are your steering mechanism. They are crucial for reinforcing expectations, providing real-time coaching and clearing roadblocks before they become major crises. A quick, “How are you getting on with that report? Is anything unclear?” can prevent a small misunderstanding from derailing a whole week’s work.

This creates a continuous feedback loop that keeps everyone aligned and moving in the right direction. It’s not about checking up on people; it’s about checking in with them to offer support.

This culture of open dialogue should also flow in the other direction.

8. How to build a culture where people can challenge expectations

Your team on the ground often has a better view of the reality of a project than you do from a distance. Creating a culture of psychological safety, where employees feel comfortable questioning or pushing back on unrealistic expectations, is a sign of a healthy, confident team.

If a team member can say, “I understand the goal, but given our current workload, that deadline isn’t realistic,” it’s not insubordination—it’s valuable data. It gives you a chance to re-evaluate and create a better, more achievable plan. This collaborative approach prevents burnout and leads to far more successful outcomes than a top-down command-and-control style.

To support these conversations, verbal agreements aren’t enough.

9. If it’s not in writing, it doesn’t exist: Document your expectations

Human memory is notoriously unreliable. A verbal agreement made in a busy hallway is not a solid foundation for a critical project. If it’s important, write it down.

Documenting key expectations in a shared, accessible place is non-negotiable. Whether it’s in a project management tool like Asana or Trello, a follow-up email after a meeting or a formal project brief, you need a single source of truth.

This simple act eliminates the “I thought you meant…” arguments. When there’s a disagreement, you can both refer back to the written record. It holds everyone accountable, including you. Smart employee management software can provide a central place for this.

With everything documented, you can then focus on tracking your progress.

10. How to measure success and celebrate wins

What gets measured gets managed. You can’t know if you’re winning if you don’t keep score. It’s essential to track progress against the specific, measurable outcomes you defined with the SMART framework.

But tracking isn’t just about spotting problems. It’s also about celebrating progress. When your team hits a key milestone, acknowledge it. When they achieve the final goal, celebrate it. Recognition is the fuel that keeps a high-performing team going. A simple “great work on this” in a team meeting or a company-wide shout-out can have a huge impact on morale and motivation.

Even after the project is complete, there’s one final step to ensure you keep getting better.

11. Lessons learned: The power of the post-project debrief

The project is done, the champagne has been popped, but the learning has just begun. One of the most valuable things you can do is conduct a “lessons learned” session or a project retrospective.

This is a blame-free review to identify what went well, what didn’t and how the process of setting and managing expectations can be improved next time. Ask questions like:

• Were the initial goals clear?
• Did everyone understand their roles?
• Did we communicate effectively?
• What roadblocks did we hit and how could we have anticipated them?

This transforms every project, successful or not, into a learning opportunity, making your team smarter, stronger and more aligned for the next challenge.

Setting clear expectations is the art and science of great leadership. By implementing these strategies, you can build a culture of clarity, trust and high performance.

Ready to raise the bar on every project?

Empower your team with the tools and insights they need to succeed. Employment Hero’s employee management solutions help you set clear goals, track performance in real time and provide meaningful feedback that drives growth. 

From onboarding new hires to managing ongoing development, our platform makes it easy to keep everyone aligned, accountable, and motivated. By turning clarity into action, you can build a more engaged, productive workforce and ensure every project delivers its full potential. x

Discover how Employment Hero can transform the way your team works and help you achieve better results, every time.

Taxes are a fact of life and income tax is usually the most important for the majority of us. But income tax in the UK is not the same for everyone. Income tax brackets in the UK put people into different categories, with different levels of tax depending on your income.

We also calculate and pay our income tax in different ways, either through our workplace or through self-assessed tax returns. It is also the responsibility of employers to accurately deduct it from payslips and provide the correct information to HMRC.

Let’s take a look at how income tax works in the UK, including the brackets, the personal allowance and how it’s calculated.

What is income tax?

Simply put, income tax in the UK is a tax you pay on what you earn. This could be money you earn from working, income from renting a property, profits you make as a self-employed person, or things like pensions and other state benefits.

How much you pay depends on how much you earn, as well as a few other factors. This is divided into tax brackets, which dictate the rate you pay. As you earn more, you move into higher brackets, so you pay more on specific portions of your income.

Most people also get a personal allowance, which is an amount you don’t have to pay tax on. But we’ll come back to that later.

There are also many types of income which are not subject to income tax in the UK, including interest from certain bank accounts such as Individual Savings Accounts (ISAs), certain state benefits and winnings from the National Lottery or Premium Bonds.

How is income tax collected?

HMRC collects income tax in several ways, mainly depending on your employment status. Most people will pay their income tax via PAYE (Pay As You Earn), meaning their employer will deduct it from their salary using their tax code.

The other way to pay income tax in the UK is to complete a self-assessment, in which you provide details of your income from self-employment, rentals or other sources.

Accuracy and timeliness are essential with both methods, with penalties applied for late submission of returns or failure to deduct the correct amounts. This is why it is so important for business owners and managers to understand their UK income tax and payroll obligations. Even when you automate the process with software or outsource payroll to someone else, it’s still your legal responsibility to get it right.

What is the personal allowance?

In the UK, the personal allowance is the amount you can earn each financial year before having to pay income tax.

The standard personal allowance for the current tax year 2025/26 is £12,570. This is the same as the previous two years, but it may change from time to time due to the government setting new budgets and policies. So if your salary was £30,000 a year, you would only pay income tax on £17,430.

Your personal allowance also reduces if you earn more than £100, or £1 for every £2 over the threshold. This means it drops to zero once you earn more than £125,140, ​​meaning you will pay income tax on all your earnings.

UK Income Tax Bands and Rates 2025/26

In the UK, income tax is calculated using a tax bracket system. These brackets determine how much tax you pay on different parts of your income. As your income increases, each share falls into a specific bracket, with higher rates only applying to income above certain thresholds.

A common misconception is that moving to a higher tax bracket means you’ll pay that higher rate on all your income. In reality, each rate only applies to income falling within its range. For example, if you earn £55,000, you will pay 20% on the part between £12,571 and £50,270, and 40% only on the amount above £50,271. Everything up to your personal allowance is tax free.

Here’s how much you pay per tax bracket in the 2025/26 financial year:

Band	Taxable income	Tax rate
Personal allowance	Up to £12,570	0%
Base rate	£12,571 to £50,270	20%
Higher rate	£50,271 to £125,140	40%
Additional rate	over £125,140	45%

Although income tax applies across the UK, devolved governments may set their own rates or have slightly different tax brackets. Currently, the Welsh Government has set income tax rates in Wales to match those in England, while Scotland has slightly different tax bands above the standard personal allowance. Income tax in Northern Ireland is currently the rates in England and Wales.

How Employers Calculate and Deduct Income Tax

Taxpayers working full time generally have their income tax managed by the PAYE system. If you are an employer or HR professional responsible for payroll, you are very familiar with PAYE.

PAYE is the way most people pay their income tax and national insurance contributions. HMRC provides employers with tax codes to calculate these amounts. You’ll find more about tax codes in our downloadable guide.

The tax code gives an employer the information it needs to determine how much tax each employee owes. Employees will then see this information on their payslips, showing deductions such as income tax and national insurance as well as items such as student loan repayments.

What happens if employees pay too much or too little in taxes?

Accuracy is important when it comes to payroll and tax calculations, but errors can happen. Often this can be due to internal administrative errors or sending the wrong tax code due to a job change, for example. More than 90% of UK businesses admit to making payroll errors every month, resulting in thousands of losses each year.

An employee will only know whether they have underpaid or overpaid their taxes at the end of a tax year, after which HMRC will send a letter, known as a P800. These letters are sent starting in June of the following tax year, so it may take some time to know if there is a problem. The letter will tell the employee how to get a refund of the overpaid tax or how to pay the taxes owed.

Usually this can be done automatically by collecting the taxes due on their payslips the following year, while requesting a refund of overpaid tax can be done online. However, since April 2024, obtaining a tax refund via PAYE is no longer automatic and employees must actively pursue their claim.

Another type of communication from HMRC about income tax discrepancies is known as a straight assessment letter, sent if taxes owed exceed £3,000 or cannot be automatically deducted from an employee’s income as usual.

Reimbursements generally arise due to a change in circumstances during the financial year, such as overlaps in leaving or starting a new job or interruptions in employment.

Underpaying taxes can occur due to factors such as earning money outside of your regular job or being subject to an emergency tax code.

Advice for employers managing PAYE

Managing PAYE as an employer can be done in several ways, both manually and automatically through payroll software. Although your payroll systems will be responsible for running the calculations, it’s good to have an idea of ​​how PAYE works so you can recognize errors if they occur.

• Make sure your tax codes are accurate – The heart of PAYE is using an employee’s tax code as provided by HMRC. This code dictates the amount of income tax an employee is liable to pay, provided the information held by HMRC is correct. As an employer, you will be notified of any changes to an employee’s code. Applying the correct tax code is essential for an employer, so make sure your records are always up to date.
• Use reliable payroll software – Payroll can be done in-house manually or using payroll software, or you can outsource it to a vendor. Regardless, you are legally responsible for carrying out PAYE tasks within payroll. Using a reliable and integrated payroll software system will make this much easier.
• Keep up to date with RTI submissions – Payroll is accompanied by submissions to HMRC, known as Real Time Information (RTI). This includes Full Payment Submission (FPS), done every time you pay an employee. It is essential that you follow them and pay them on time, otherwise you could be fined.
• Provide clear communication to employees – As with most aspects of managing a workforce, communication is key. Providing your employees with timely compensation information is essential to maintaining trust.

How Employment Hero can help you

Managing tax codes, PAYE, RTI and everything that comes with payroll can take over your working life – but it doesn’t have to be. Using Employment Hero’s payroll services can make compliance simple and scalable. Whether you’re just starting out or taking your business to new heights, we have the right solution for your needs.

From payroll software to outsourcing, we can make payroll effortless. Talk to us today to find out how.

Staff management is not a little task for those who operate in the housing and social care industry.

Make sure that there are enough qualified personnel available at the right time is a constant demand and can quickly feel overwhelming.

As such, relying on workers from the agency may initially seem a rapid solution, but this often increases costs and disrupts the team’s cohesion.

So what can we do? A digital rotation system can change the situation here.

In this blog, we have covered three ways including a digital rotation system can help effective staff planning.

1) Simplify changes in change with self-service

Change changes do not need to be a problem.

The traditional ways of managing quarters of work, such as conversations in person, telephone calls and SMS, often lead to delays and bad communication, creating stress for staff and managers.

However, a digital Rota system, with self-service functionality, changes everything.

Staff can check the schedules, request changes and exchange changes from any location via a practical mobile application.

Managers also benefit from this because they may approve or refuse requests in a few clicks.

2) Identify planning gaps.

Manual management management can quickly become frustrating and timing, especially when it comes to change of last minute change or try to locate the missing coverage.

Rely on printed hours, obsolete calculation sheets and frantic calls / texts to try to fill the gaps is ineffective and stressful for all those involved.

With a digital rotation system, you receive a real -time overview of changes, highlighting slots or non -filled conflicts.

This allows you to take fast measures.

Via the system, you can also send notifications to the available personnel or reallocate resources.

3) Improve the visibility of staff

A digital rotation system allows staff to access the schedules at any time, anywhere, whether they are at home, on the go or at work.

With Rotas accessible on any device with an internet connection, it is useful:

• Improve staff visibility
• Rationalize Rota’s communication
• Offer easier accessibility to staff

Manage modern rotation requests

Today’s workforce has evolved priorities and organizations must adapt their approach to planning and communication in rotation.

Modern employees expect quick and transparent access to their schedules, often via their phone, like any other form of communication.

By adopting these expectations, organizations can build a flourishing and competitive workplace.

The three main HR challenges impacting housing and social care organizations

Compliance is not the only challenge that has an impact on those of housing and social care!

Our recent guide covers the three main HR challenges impacting organizations, offering tangible advice and advice.

Download the free guide here and discover practical solutions and ideas to help you meet these front HR challenges.

We bet you didn’t know that 58% of employers don’t use any tools to help their employees understand their payslips. We know no one wants to be in the 58%, so here’s how you can avoid it. 

The reality is, helping your employees understand their salary statement is really important, but payslips explained is challenging without having a solid understanding yourself. Whilst we all know what should be included on a salary statement, having a deeper understanding of what that means is a rarity. 

Here we’re going to take a deep dive into UK payslips explained, to help you empower your employees to understand their pay. 

UK Payslips explained: What is a payslip?

We’ve all received one, and for business owners or HR professionals, you’ve probably created a few. So we get that this sounds like a simple question, but for the sake of making sure we are all on the same page, we thought it would be wise to identify what a salary statement actually is. 

Lets break it down – a payslip is a written statement that shows an employee’s earnings and deductions for a specific pay period. Although employers can opt to either provide them electronically or in print (we recommend electronically!), they must be made available to employees on or before their payday. 

Why are salary statements important?

For businesses

Although statements of earnings are given to employees, they are also important records for businesses. Here are some of the key reasons why: 

• Legal compliance – By law (Employment Rights Act 1996), employers must give all their employees and workers salary statements from their first payday. Therefore, to remain compliant, all businesses must be providing written proof of earnings to all employees and workers. 
• Tax reporting – Salary statements include important information that is needed for filing tax returns and ensuring accurate tax reporting. 
• Dispute resolution – While all business owners hope they will never encounter a dispute, they do occasionally happen. Salary statements can help to protect your business and serve as evidence to help resolve issues. 
• Financial auditing – Proof of pay serves as documentation for internal financial audits. This allows businesses to track payroll expenses and to identify any discrepancies. 

For employees

Everyone loves getting paid, so there’s a certain satisfaction to receiving your salary statement. But they’re helpful for far more than just admiring your earnings! 

• Proof of income and employment – When applying for loans, mortgages, or renting a property, you will often need to provide salary statements as proof of your earnings and employment. 
• Tax filling – Salary statements provide the information you’ll need to complete your tax return. 
• Dispute resolution – If there is a discrepancy with your pay, your salary statement can serve as evidence to support your claim.
• Checking accuracy –  You can review your documents to ensure your hours worked, pay rate, and deductions are all calculated correctly. 

What should be on my payslip in the UK?

In order to comply with UK law, a payslip must include:

• Gross amount – this is the total pay before deductions.
• Net amount – this is the total pay after deductions.
• Variable deductions – this is where the amounts depend on the amount of pay, for example tax, National Insurance, student loan repayments and pension contributions.
• Amounts of any fixed deductions – for example trade union subscriptions.
• A breakdown of how the wages will be paid if more than one payment method is used – for example bank transfer and cash.

Although not a requirement, salary statements might also include: 

• Time period the pay covers.
• Tax code of the employee or worker.

Fixed deductions can be given in a separate statement, known as a ‘standing statement of fixed deductions’. It should include:

• What the deduction is for.
• How much it is.
• How often it’s paid.

If the standing statement is separate from the main payslip, it’s only valid for 12 months. It must be reissued every year, or earlier if the fixed deductions change. 

What are deductions?

If you want to help your employees understand their salary statement, you need to make sure they understand what deductions are. 

Deductions are amounts withheld from an employee’s pay. They are taken out of a salary to cover taxes, benefits and garnishments. It’s important to keep in mind that deductions can be mandatory or voluntary. 

Mandatory deductions include: 

• • Income Tax: Withheld from an employee’s paycheck to fund the UK’s infrastructure, social care, and healthcare.  It’s calculated based on an employee’s annual earnings and is deducted through Pay As You Earn (PAYE). The amount of tax deducted depends on how much employees earn annually.
  • National Insurance: Also deducted directly from an employee’s salary. Employers make separate payments based on the wages of their staff. Similar to income tax it also helps to support state services, like NHS and unemployment benefits. 
  • Pension Contributions: A statutory deduction taken directly from an employee’s salary and placed into their company pension scheme. Employers are legally required to automatically enrol all eligible employees into a workplace pension, helping them to save for their retirement. Contribution rates vary based on the employee’s contract and employment status, but there are statutory minimum rates set out by the UK government.

• Student Loans: Only applicable if an individual has borrowed from the government to pursue higher education and whose earnings exceed a certain threshold. 

Voluntary deductions cover: 

• Pension Plans: Employees may wish to contribute more to their pension via salary sacrifice schemes. This means a portion of an employee’s earnings are exchanged for pension contributions. This is a perk offered by some employees through private pension providers.

• Health Insurance: Some employers may wish to offer health insurance for their employees, which gives them access to private medical care. To cover the cost of the employee’s membership in these health insurance schemes, a payroll deduction is taken from their salary. 

• Employee Benefits: Employers can opt to offer additional benefits in order to improve employee satisfaction. Benefits such as gym memberships, cycle to work schemes and childcare vouchers are included. The cost of these benefits is then covered by salary deductions from their salary statement.

What is the difference between gross and net pay?

As an employee, the element on a salary statement you’re likely to be most interested in is how much you’ve been paid. But as you will have noticed, there are two areas that outline pay amount, gross and net pay. 

So what’s the difference?

Gross pay 

Gross pay is that total amount an employee earns before any deductions are taken out. Gross pay includes salary, bonuses and overtime. 

Net Pay 

Net pay is the amount of money an employee receives after deductions have been taken out of their gross pay. Net pay is also often known as take-home pay. 

How to help employees understand payslips 

Improve clarity around payroll

One of the main challenges with payroll is a lack of clarity and understanding. And this is exactly why payslips explained UK is so important. 

Employees often don’t know how their pay is calculated, or how other elements (like pensions) are documented. This can cause issues for small business owners or HR professionals, as they may get recurring questions from employees asking for elements of their payslips explained. 

The best way to reduce questions about what is included on a salary statement, where information is documented, or how to read one is by being transparent. This could be achieved through adding further detail on salary statements and expanding fields to include future itemisation. 

Customise payslips

A standard payslip layout may not contain enough for employees and workers to get the full picture of what they are being paid for, or what deductions have been taken. By adjusting salary statements  to include more detail, HR teams running payroll, and business owners, are likely to get less queries. 

Instead of just using one template, HR managers of business owners should compare different layouts and details to establish what else should be included. To get further insights on what employees would value, consider conducting a survey about payslips explained and base a new template off of these findings. 

Use payroll software

Arguably the most significant change in payroll over recent years is digitalisation. The ability to provide these documents via email or an online platform has benefits for both employers and employees. 

Payroll software enables HR teams to be flexible and update templates based on employee queries.

For employees, a platform that can be accessed at any time allows for a “self-service” approach. Having the ability to easily view current and previous salary statements assists with payslips explained UK and  is likely to reduce confusion and give power back to your team regarding their pay. 

Understanding tax codes

Another aspect of a salary statement that both employers and employees should be aware of are tax codes. But what are they?

At their core, tax codes are numbers that are issued by HMRC to everyone who is employed through PAYE in the UK. Their purpose is to ensure that employees are paying the right amount of tax for their salary. It’s important to note, though, that it’s up to individuals to check that they are on the correct tax code. 

Luckily, finding your tax code is pretty simple, and there are several places you can look for it: 

• On a ‘Tax Code Notice’ letter from HMRC
• On a salary statement
• On the HMRC app 

Breaking down tax codes

Looking at a tax code can be really confusing, and without taking a deep dive, most people don’t understand what the numbers and letters in the code mean. So as part of our mission to simplify employment, we thought we should break it down. 

What do the numbers in a tax code mean?

The numbers shown in a tax code tell an employer how much tax-free pay an individual is allowed. The last digit of your tax free pay is removed to create the code (so a £12,570 personal allowance becomes the digits 1257 in the code). 

As an example, if your code number is 1257, you are entitled to tax-free pay of £12,570. This means if an individual earns £1,047 or less per month (£12,570 divided by 12 months), you will not need to pay any income tax. Any earnings above this amount will be taxed at the correct rate for their salary. 

As an employer, you are responsible for working out how much tax is due and taking it from an employee’s pay. The tax is paid over to HMRC.

What the letters in a tax code mean

The second part of a tax code is a letter. Take a look at the list below to understand what the letters on a tax code stand for. 

• L – Standard tax free personal allowance, under 65.
• M – Marriage allowance where you’ve received 10% of your partner’s personal allowance.
• N – Marriage allowance where you’ve transferred 10% of your personal allowance to your partner.
• T – Tax code includes other calculations to work out pension.
• 0T – Personal allowance has been used up, you’ve started a new job or your employer doesn’t have details required to issue a tax code.
• BR – Income from this job or pension is taxed at basic rate (applicable if you have more than one job or pension).
• D0 – Income from this job or pension is taxed at a higher rate (applicable if you have more than one job or pension).
• D1 – Income from this job or pension is taxed at an additional rate (applicable if you have more than one job or pension).
• NT – No tax payable on this income.
• S – Income taxed using Scotland rates.
• S0T – Personal allowance (in Scotland) has been used up, you’ve started a new job or employer doesn’t have details required to issue a tax code.
• SBR – Taxed at basic rate in Scotland.
• SD0 – Taxed at intermediate rate in Scotland.
• SD1 – Taxed at a higher rate in Scotland.
• SD2 – Taxed at top rate in Scotland.
• C – Income or pension taxed at Wales rates.
• C0T – Personal allowance (in Wales) has been used up, you’ve started a new job or employer doesn’t have details required to issue a tax code.
• CBR – Taxed at basic rate in Wales.
• CD0 – Taxed at higher rate in Wales.
• CD1 – Taxed at additional rate in Wales.

What should employers know about tax codes?

Whenever a new employee joins your company, there is plenty of admin to get through, and working out a tax code is usually part of this. Most of the time, assigning a tax code is straightforward, and you can work it out by looking at a P45. 

It’s also important to remember to update employees’ tax codes at the start of a new tax year. If a tax code changes during the year, HMRC will email you with a reminder to update payroll records. 

Worried about deducting the right amount of tax based on your employees tax codes? Not on our watch. Take the stress out of tax deductions by putting your employees tax codes into your payroll software, and let the software work out how much needs to be deducted throughout the year. 

Common payslip queries

How do I read my UK payslip?

To read a salary statement, pay attention to details such as gross pay, net pay, your tax code and deductions. This information will give you an understanding of what you have earned throughout your pay period as well as where any deductions are going. 

If you have questions about particular items on your, or need your payslip explained, contact your HR department.

What is the law on payslips UK?

According to the Employment Rights Act 1996, employers must provide all of their employees and workers with payslips from their first payday. 

Workers can include agency workers, and people on flexible hour contracts. 

Should holiday pay be shown on a salary statement?

Yes, holiday pay should be outlined on a salary statement, and our experts recommend it is noted down as a separate line item. 

What is the PAYE in the UK salary slip?

PAYE stands for Pay As You Earn. Most employees in the UK pay Income Tax through PAYE. It’s the system an employer or pension provider uses to take Income Tax and National Insurance contributions before wages or pension are paid. 

Tax codes determine how much should be deducted. 

Improve your payroll with Employment Hero

Running payroll, sending salary statements and making sure your business is compliant with UK law is a lot of work. And who has time for all that? As a small business owner or HR professional, we know you don’t.  

This is where Employment Hero can help you out. Employment Hero is the world’s first Employment Operating System (OS) that helps to launch businesses on the path to success by powering more productivity every day. 

We offer everything your business needs, from finding and hiring top talent using SmartMatch to seamlessly onboarding new hires, automating complex payroll, and driving employee engagement and morale – all backed by UK-based expert support. 

Supporting over 25,000 UK businesses, why not see how we can supercharge your business? Book a demo today to learn more. 

One system. Everything Employment.

In today’s competitive job market, it’s more important than ever to make your job application stand out to hiring managers and potential employers.

Whether you’re a recent graduate looking for your first job, or an experienced professional looking for a career change, these tips will help you to create a job application that impresses the hiring manager and gets you noticed. 

So, let’s dive in and explore some ways to make your job application stand out!

What’s required to make your job application stand out?

Hiring managers and CV scanning technology review hundreds of resumes per job listing, so it’s important to stand out from the other applicants to increase your chances of scoring an interview. 

But what does this mean? How can you stand out without spending hours poring over each and every cover letter? Well, people who stand out in job applications are people who can make a real connection. 

It’s not just about your skills and qualifications. People want to know who you are and what you bring to the table. This can be as simple as providing examples (you know you’re great at customer service, but how can you prove this to the hirer?) or even adding a photo to your resume so there’s a face to add to the name.

How long should your resume and cover letter be?

The Ideal length for a resume and cover letter will vary depending on the industry, job level, and the specific requirements of the employer. However, in general, it’s best to keep them concise.

It’s best practice for a resume to be no longer than two pages, and a cover letter to be one-page maximum. If you’re struggling to keep things brief, don’t be afraid to use dot points in your resume, and cut back as much info as you can in your cover letter. Save some stories for your interview!

How honest should you be in a job application?

Being honest is important. Lying or exaggerating details in your job application may give you a better chance at landing the job, but it will only hurt you if you get the position and can’t follow through. Plus, being honest about any opportunities for development helps build trust early, and is a green flag for potential employers. 

Keep in mind you’re not obligated to disclose anything you’re not comfortable with. If at any point in the application you are asked to provide personal information, such as your home address, passwords, or things like marital status, sexuality and religion, you are allowed to refuse.

Read more: How to write your CV to land a remote role

What are some common mistakes to avoid if you want to make your job application stand out?

Here are some common job application mistakes that people make: 

• Typos and grammatical errors: Taking time to proofread your application materials can make a big difference.
• Incomplete information: Make sure to include all the important information, such as employment dates, job titles, or education qualifications, to make it as easy as possible for your potential employer to determine how suitable you are for the role.
• Not following instructions: Make sure to read application questions and instructions carefully to show your attention to detail (and how great you’ll be once you get the job.)

10 Tips to make your job application stand out

Tip 1: Add a bit of personality

If you put yourself in the hirer’s shoes, you might get a vision of the hundreds of applications you have to go through when filling a role. Adding a personal touch will distinguish you from the majority.

Ways to personalise your application:

Add a personal branding statement: Start your resume with a brief statement that summarises your unique qualities and strengths. For example, “I create personalised hairstyles that reflect clients’ unique personalities and lifestyles with an eye for detail and current trends. Through open communication and ongoing professional development, I become a trusted partner in their beauty journey.”

Include relevant hobbies and interests: If you have hobbies or interests that are relevant to the job, include them in your resume. This can help showcase your personality and give employers a sense of your passions and skills outside of work. For example, “Volunteer as a mentor for underprivileged youth to help build leadership skills.”

Tip 2: Use keywords

Welcome to the digital age. Now, many employers use search tools and CV scanning technology to skim applications for specific keywords. Don’t worry, this isn’t as tricky as it sounds, and there’s no ‘secret keywords’ you need to include to make your job application stand out. Simply address the selection criteria in your application.

What could this look like?

Skills: If the job requires proficiency in Microsoft Office, make sure to include this skill in your resume.

Industry-specific jargon: This demonstrates your knowledge of the industry. If you’re applying for a job in marketing, use terms such as “SEO,” “content marketing,” and “branding” in your resume.

Job-specific keywords: Every position has specific keywords and phrases associated with them. If you’re applying for a job in sales, you could use keywords such as “prospecting,” “lead generation,” and “closing deals.”

Tip 3. Include a photo

We’re visual creatures. Applications with photos are more likely to be remembered. But make sure to use a photo appropriate to your industry (maybe leave the selfies for Instagram).

However, unless you’re working as a performer of some kind, an employer requesting a photo from you could be a red flag. Only include a photo of yourself if you feel comfortable —it’s not a must-have to make your job application stand out. 

Tip 4. Add examples

Sure, we know that you have great customer service and time management skills. But how do you show this to potential employers? Include examples to showcase your skills in real-world scenarios.

For example, instead of:

• Strong phone communication

You could write:

• On average, answering 50 inbound calls per day

Tip 5. Get a referral

If possible, get a referral from someone in or associated with the company. If you’re up against other candidates with similar qualifications, a referral can be the factor that sets you apart.

How do I get a referral?

You can reach out to someone you know who works at the company and ask if they’d be willing to refer you for the job. Be sure to provide them with a copy of your resume and a brief overview of why you’re interested in the position. 

If you don’t know anyone at the company, you can try reaching out to people in your professional network who may have connections there. LinkedIn can be a helpful tool for this.

Tip 6. Provide a portfolio

Depending on the job you’re applying for, a portfolio can also be an opportunity to showcase your creativity and out-of-the-box thinking. This can be particularly important if you’re applying for a job in a creative field, such as graphic design or marketing.

Design programs like Canva offer a wide range of free customisable templates that you can use to create a professional-looking portfolio in no time – including a one-page website builder that could stand out amongst a sea of stock standard portfolios.

Tip 7. Demonstrate your passion

Demonstrating your passion in a job application is an important way to stand out from other applicants and show your potential employer that you are truly invested in the position. 

To show your passion in a job application, research the company and industry thoroughly and align your skills with their mission in your cover letter or resume. 

Tip 8. Include a pop of colour

A pop of colour can help to make your application visually appealing and memorable. However, it’s important to use colour strategically, as too much can come across as distracting and unprofessional. Stick to one or two colours that are easy to read, and avoid using neon or overly bright shades that can be hard on the eyes.

You can also use colour to highlight specific sections of your resume or cover letter, such as headings or important achievements.

Tip 9. Keep it short ‘n’ sweet

Employers are often swamped with applications, and a long, rambling one can be a turnoff. Getting straight to the point shows that you value the employer’s time and that you’re able to prioritise information effectively. 

A concise application can also be easier to read and retain, making it more likely that the employer will remember you and your qualifications. By focusing on the most important information and avoiding unnecessary fluff, you can make your application stand out as a well-crafted, thoughtful, and professional document.

10. Be proactive

Don’t be afraid to follow up with the hiring manager or recruiter if you haven’t heard back in a week or two. This shows that you’re enthusiastic about the position and are taking the initiative to make contact.

Send them an email (or contact them directly through the app) and keep things polite. The message could look like this:

“Hello,

I hope you’re doing well. 

I’m following up on my job application for Retail Assistant on 10 April 2023. I’m excited about the opportunity to join your team and believe that my skills and experience make me a valuable asset to your organisation. 

Please let me know if there’s any additional information I can provide to support my application. I’m enthusiastic about the company’s mission and culture and confident that I would thrive in the role. Thank you, and I look forward to hearing from you soon. 

Best regards,

Laura”

Common job application questions and sample answers

What are your salary expectations?

Example answer: “I understand that between $70,000 and $77,000 is in line with the industry average, and is appropriate for my skills and experience level. However, I am open to being flexible because I am excited about this opportunity.”

Why are you leaving your current job?

Example answer: “I have been with the company for a long time and I feel I need a change of environment to achieve growth.”

Why are you interested in this position?

Example answer: “I researched your company and I really connect your values and your mission. With my experience and personal values, I feel working here would be very fulfilling for me.”

More tips for job seekers changing career paths

How can I make my resume stand out if I’m changing careers?

Emphasise the skills you have developed in your current or previous careers that are transferable to your new career. For example, if you’re switching from hospitality to administration, you can focus on your customer service and time management skills.

Consider using a functional or combination resume format – this highlights your skills and accomplishments instead of your chronological work history, which is great when you’re trying to emphasise transferable skills. 

What if I don’t have enough relevant work experience?

Don’t be afraid to apply for jobs you may not have the most relevant experience for. Hiring managers look for many other attractive attributes, like transferable skills, volunteer experience, or your passion. But most of all, your confidence is what will win them over! Believe in yourself.

For instance, let’s say you’re going for an Events Coordinator role, and in the past you’ve spent your Saturday mornings serving Bunnings snags with your local Lions Club. You could include this in your resume, under volunteer work, and then include a paragraph like the below in your cover letter:

“Volunteering for the Lions Club provided valuable event coordination experience, including careful planning, communication, and adaptation. I managed setup, organization, inventory, and financial transactions, enhancing my attention to detail and organizational skills. Overall, this experience taught me the importance of effective event coordination, making me an asset to a professional event coordination role.”

How can I show my transferable skills on my resume?

A functional or combination resume format is a great way to highlight your skills, which are just as important in an application as experience and qualifications. But to really make them shine, add a little extra something to your dot points. Give a brief example or quantify your achievements.

For example, instead of:

You could write:

• Promoted from Server to Team Leader in 6 months or;
• Sales grew by 32% after I was promoted to Assistant Manager

It’s likely that many other applicants going for the role will list similar skills. Employers are more likely to remember your skills specifically when they are connected to stories and numbers you personally achieved.

Read more: 67 expert resume and cover letter tips from recruiters

Getting ready for a job interview

Congrats, you got an interview! Now, let’s keep this ball rolling. 

Preparing for a job interview can be nerve-wracking, but there are some steps you can take to feel more confident and ready to impress your potential employer. 

Here are some tips on how to get ready for a job interview: 

• Research the company: Do some research on the company you’re interviewing with. Find out what their mission is, their products or services, and their company culture. Most companies ask what you know about them, so it’s important to show you have prepared and you care about the opportunity.
• Review the job description: Read over the job description and note any key skills or qualifications that the employer is looking for. Be prepared to discuss how your skills and experience align with the job requirements. 
• Prepare your responses: Think about the questions you might be asked during the interview and prepare your responses. You can even practise your answers out loud, so you feel more comfortable with your responses during the actual interview. 
• Dress appropriately: Do some research to see what their current staff wear to work. Do they wear slacks and blazers, or jeans and t-shirts? Showing up dressed for the job makes it easier for the interviewer to envision you in the role. 
• Arrive early: Plan to arrive at least 10-15 minutes early to the interview. This will give you time to get settled and calm your nerves, and we’re sure the employer will appreciate your punctuality.

Find your next job with the Employment Hero

So, let’s recap: do your research, keep your application short and sweet, and let your personality shine through with a pop of a colour and a photograph.

By taking the time to craft a compelling job application, you can increase your chances of standing out and landing the job you want.

If you want to search hundreds of open roles from the best employers, visit Employment Hero Jobs and Create a unique Candidate Profile. You’ll be able to personalise your experience, upload your resume, CV and important certifications, and take this profile with you wherever you go.

So, go ahead and apply these tips and strategies, create a Jobs Profile today, and you’ll ace your next job application!

 

Disclaimer

The information in this article is current as at July 2023, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero) for its Swag brand. The views expressed in this article are general information provided in good faith to assist job seekers in the current market, and should not be relied on as professional advice. Some Information is based on data supplied by third parties and whilst such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any important career decisions or solely relying on the information in this article.