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  • June 27, 2020

Explained The Payroll Terms

As soon as your business is large enough to have employees, you will need to begin to manage your HR payroll. This may require extra knowledge outside of your normal sphere of experience, and plenty of hard work. 

It will pay to understand payroll terminology from the start as mistakes and omissions can be costly. If you want to get more information about genuine online paystubs then, search the browser.

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To get you started, here are a few payroll terms made clear:

Gross pay

This is the total amount paid by you, including salary, overtime, and any bonuses and commission, with no deductions.

Net pay

Net pay is what the employee will receive on payday after national Insurance and tax, and any voluntary payments to charity or pension schemes, for example, are deducted.


Standing for pay as you earn, PAYE means the employee's income tax is paid at source, i.e. deducted by you and paid to HMRC before calculating the employee's net pay. The amount deducted is determined by the correct tax code for that employee.

National insurance

Employees are required to pay a fixed percentage of their wages as National Insurance, allowing access to the NHS and various social security benefits.


We've all seen these, but it's now your job to produce one. It must state gross and net pay, and clearly outline all the deductions.


Standing for bankers' automated clearing services, BACS allows you to make electronic payments directly into your employees' bank accounts.


Roberta Garcia

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