You get your payslip every fortnight or every month, but what are all the different numbers on there and what do they mean?
Coming out of school, there’s a LOT of random knowledge living rent-free in our heads, like Pythagoras theorem, the themes of 1984, or what happens when you light copper on a bunsen burner.
But somehow, there’s some knowledge, just as, if not more important, that school forgot to teach us - like how to read a payslip.
You know, those physical or digital slips that let you know pay-day is finally here and help you check if your boss is short-changing you.
Here’s an example of a payslip.
This is what a standard payslip looks like from Xero, which supports over 100,000 Australian businesses.
Yours might look a little different, especially if you work in hospitality or medicine, but all payslips contain the same core information.
And learning to read your payslip will help you stay on top of your income, and also help you during tax time.
Each number on the payslip corresponds to the explanation below.
Now first, we cover the basics (1)
Your payslip should show:
Next, your income (2)
This is the number we like the most - it’s how much dough you’ve made in your pay period.
Oh and if you weren’t quite sure of the acronym YTD, it means “year to date” or in simple terms, how much you’ve earned in this financial year.
Next comes tax (3):
This section, which usually says PAYG will lay out how much tax has been automatically deducted from your payslip by your employer.
PAYG or “pay as you go” is a tax withholding system.
With this system, your employer withholds a portion of your salary on your behalf and pays it to the ATO so that you’re not paying a massive lump sum to the ATO at the end of the financial year.
When the end of financial year hits and it's time to do your tax return, you can see whether you’ve paid extra tax or not enough.
If you have a HELP or HECS student loan, your employer will often withhold an additional portion of your salary and pay it to the ATO on your behalf to repay your loan.
The amount withheld will depend on your salary.
Compulsory HECS repayments kick in at $54,435, and you can see the rest of the breakdown here.
Super (4):
Next, if you’re over 18, or if you’re under 18 but working over 30 hrs a week, you’ll have a section in your payslip that goes towards your superannuation.
Your employer has to pay a minimum of 11.5% of your income to your superannuation, which is cash put aside and invested for your retirement.
The Super Guarantee, which is the minimum an employer can pay in superannuation went up from 11% to 11.5% on 1st July 2024.
If you haven’t already, now is a good time to make sure your super has gone up to 11.5%!
Leave (5):
If you’re a part time or full time employee, you’re entitled to leave benefits.
You should be able to see your leave balance in your payslip.
Your employment contract should lay out your leave entitlement, which you can then cross check with your payslip.
It’s also a good idea to keep your own log of annual and personal leave that you take so you can cross check it against what’s in your employer's system, and make sure your leave is accurate.
The final checks:
If you notice something not quite right about your payslip, or have questions you can always have a chat to your employer about what’s going on.
And if you’re struggling to get to the bottom of it with your employer, hit up the FairWork Ombudsman to take the issue further.
And finally, to make payslips easier for you, we’ve condensed this information into a little checklist that you can screenshot when you’re ready to review your payslip.
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