Pay - an overview of obligations

Issuing pay statements

As an employer you are legally obliged to give each employee a written itemised pay statement, usually known as a payslip or wage slip. You must issue it at, or before, the time you pay your employee.

This right to receive an itemised payment does not apply to:

people you pay who are non-employees, eg freelancers and contractors
certain other groups, including police and some people who work at sea

Content of a pay statement

An itemised pay statement must show:

the gross amount of the wages or salary before deductions
the amounts of - and reasons for - any fixed deductions, eg trade union subscriptions, or the total figure for fixed deductions, when a separate standing statement of the details has been provided
the amounts of - and reasons for - any variable deductions
the net amount of wages or salary payable after deductions
a breakdown of each part-payment - such as part by cheque, part in cash

Standing statements of fixed deductions

A pay statement does not have to include the amount and purpose of every separate fixed deduction every time.

However, if you don't issue a payslip that does this, you must give the employee a standing written statement of fixed deductions at least once every 12 months.

This statement must state for each item deducted:

the amount
the intervals at which the deduction is made
the purpose or description, eg trade union subscription

You must give the employee this statement at, or before, the time of issuing any pay statement which quotes the total figure of fixed deductions.

Variations in fixed deductions

If there is any change to an employee's fixed deductions, you must give them either:

notification in writing of the details of the change
an amended standing statement of fixed deductions, which is then valid for up to 12 months

Tribunal claims in relation to pay statements

An employee may complain to an employment tribunal where you have:

Failed to give them any kind of pay statement.
Not included all the required details in an itemised pay statement or standing statement of fixed deductions. As an employer, you may also apply to a tribunal for a decision on what should be included in a pay statement or standing statement.
Dismissed them for seeking to enforce a right in relation to a pay statement. This right applies regardless of the employee's length of service.

Employees must make their complaint while employed by you or within three months of leaving.

Note that an employment tribunal cannot deal with a question relating only to the accuracy of an amount stated in any statement.

For more information on employment tribunal procedure, see our guide on handling employment tribunal claims.

Compensation for claims in relation to pay statements

A tribunal may award an employee compensation at its discretion if it finds that you made un-notified deductions of pay, ie deductions that did not appear on a pay statement or a standing statement.

The discretionary amount awarded will not exceed the total of the un-notified deductions during the 13 weeks immediately before the date the application was made to the tribunal.

All unnotified deductions enter into this calculation, whether or not they were made in breach of a contract of employment.

Subjects covered in this guide

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