How Are Payroll Deductions Calculated?

Do you work in payroll, or are you an employee wanting to check your payroll deductions yourself? In this article we explore the simple process you’ll need to follow to accurately check your payroll deductions.

Calculating deductions is relatively simple. However, carrying these out yourself can be time-consuming and leave you open to costly errors.


While many organisations now use payroll software to carry out these calculations automatically, it is always worth double checking to ensure the calculations are correct. Getting it wrong can be incredibly stressful for the employee and can waste valuable resource time putting the error right.


To check your payroll calculations, you’ll need to use GOV.UK’s tax and national insurance calculators, available on the GOV.UK website.


Here, you’ll be asked to enter your employee’s tax code, period of pay, as well as previous total pay to date and previous total tax due to date. Finally, confirm your organisation’s payday at the bottom and click ‘next’.


You’ll be presented with a PAYE tax calculator that shows you the exact tax and national insurance deductions due for that employee over the set period of time.*


While this sounds very simple, the reality of carrying out the deduction process for hundreds if not thousands of colleagues can be daunting, not to mention the hassle you’d face if things went wrong.


This is where eSlip comes in.


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Let eSlip Payroll Do The Hard Work For You

More than 1000 organisations have chosen to use outsourced payroll services with eSlip, freeing up valuable resources to focus on the things that really matter.


eSlip provides complete payroll services to small and medium-sized businesses across the UK. Our dedicated team of payroll experts have decades of experience combined and are on hand to deal with any payroll issues you may have.


At eSlip, we are experts in payroll deductions (including student loans) as well as setting up new starters, end of year reporting, electronic payslips, HRMC remittance reports, P45 checking, query resolution, ‘what if’ calculations departmental costings and much more.


What’s more, all of our systems and processes are data protected, so you can relax knowing your employees' details are safe in our hands.


To find out how eSlip can help your organisation, give us a call today or request a quote online.


Please note: HM Revenue & Customs cannot be held liable for incorrect output from the online


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