A growing number of young UK workers are struggling to understand their payslips, with nearly a third unsure about tax deductions or pension contributions, a new survey has found.
The figures come from PayFit, a payroll software provider operating across Europe, which commissioned pollster Ipsos to survey nearly 2,000 workers in the UK, France and Spain. The research found that while UK employees were the most confident overall regarding payslip literacy, younger staff were significantly more likely to face confusion.
Among 18 to 34-year-olds in Britain, 32 percent said they did not fully understand how their tax was calculated, compared to 24 percent across all age groups. A further 24 percent said the same of pension deductions, and another 24 percent were unsure whether they had even been paid correctly.
The lack of understanding appeared to impact communication with HR departments. Younger staff were more than twice as likely as others to contact their HR or payroll team every month with payslip queries. While the UK average stood at 13 percent, this rose to 28 percent among under-35s. Just over a third (38 percent) contacted HR between once a quarter and two to three times a year.
Payslip trust remains high despite confusion
Despite the confusion, most British workers still said they trusted their payslip to be accurate. PayFit found that 94 percent of UK respondents believed their payslip was correct, compared with 88 percent in Spain and 81 percent in France. But just under one in five (18 percent) in the UK said they were concerned about not being able to spot underpayments.
The data shows little progress from a separate PayFit survey earlier this year, which found that nearly 60 percent of 18 to 24-year-olds in the UK did not understand their pay deductions. Nearly a third said clearer payslip information would help them make better financial decisions.
PayFit’s co-founder and chief executive, Firmin Zocchetto, said the results reflected how a lack of clarity around payroll could lead to uncertainty in other areas of life, from applying for loans to budgeting for holidays. “When workers don’t understand their payslip, they’re left second-guessing whether they’ve been paid correctly, what’s gone into their pension or how much tax they’re actually paying,” he said. “This level of uncertainty can stall decisions, whether that’s applying for a mortgage or simply figuring out if they can afford to book a holiday.”
Zocchetto added that with changes to pension rules and concerns over potential tax increases in the Autumn Budget, there was growing pressure on HR teams to help employees understand basic payroll information. He said his company was launching an interactive payslip feature to help employees get real-time explanations of how their pay is calculated.
HR experts urge clearer communication
The findings reflect a wider challenge around payroll transparency and communication, particularly for younger or less experienced employees. Experts say that while payslips are legally required, they are often difficult to interpret without proper guidance or explanation.
The Chartered Institute of Payroll Professionals, in a report earlier this year on employee payslip understanding, warned that confusion around deductions can contribute to financial stress and reduce employee engagement. The report noted that younger workers, especially those early in their careers, are more likely to struggle with interpreting pension contributions, student loan repayments and tax codes, leading to potential mistrust or reliance on HR for clarification.
What employers can do to improve payslip understanding
HR and payroll professionals suggest several steps employers can take to improve payslip literacy:
Clear formatting: Simplifying payslips by avoiding jargon and using plain English can reduce confusion. Breaking out each element — basic pay, tax, national insurance, pension and any adjustments — helps employees see exactly what they’re paid and why.
Interactive payroll tools: As PayFit and other providers roll out digital payslips with clickable explanations, employers may benefit from adopting similar platforms that offer more accessible and personalised payroll data.
Onboarding education: Including payslip explanations during onboarding or induction can prevent problems later. Some firms now offer short videos or guides for new hires.
Regular drop-in sessions: HR or payroll drop-ins, either virtual or in-person, can give staff the opportunity to ask questions in a less formal setting.
Encouraging questions: Creating a culture where it’s acceptable to ask about payroll can help remove embarrassment, particularly for younger or less experienced workers.
UK leads Europe on payslip literacy, but support still needed
The survey also revealed differences between countries. While UK workers showed the highest overall understanding of payslips, at 73 percent, it dropped to 54 percent in Spain and just 29 percent in France. The report said this was partly due to the complexity of the French payroll system, which can involve multiple tax and benefit agencies.
But across all countries, employees reported relatively low engagement with HR over payslip queries. In France, 75 percent said they contacted HR or payroll only two to three times per year or less. In Spain, 64 percent said the same, though 24 percent reached out at least once a quarter.
With nearly all UK respondents expressing trust in their employer to get payslips right, observers say the confidence should not be taken for granted. As regulations shift and automation increases, staff need to be equipped to spot mistakes or ask questions.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
