{"id":7813,"date":"2022-01-27T13:55:20","date_gmt":"2022-01-27T18:55:20","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?p=7813"},"modified":"2026-01-15T11:49:51","modified_gmt":"2026-01-15T16:49:51","slug":"understanding-payslips-help-employees","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ca\/blog\/understanding-payslips-help-employees\/","title":{"rendered":"Understanding payslips: 7 tips to help your employees"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tUnderstanding payslips: 7 tips to help your employees\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Ashley\t\t\t\tAshley Thompson<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

How well do you understand your company\u2019s payslips? Better yet, how well do your employees understand them?<\/p>\n\n\n\n

Understanding payslips can be confusing for employees. While some never look at their payslips, others go over theirs with a fine-tooth comb, checking for discrepancies.<\/p>\n\n\n\n

You need to be able to address any queries your employees may have and demonstrate that your payroll processes are accurate every time.<\/p>\n\n\n\n

And if your business has furloughed staff due to the coronavirus<\/a> (COVID-19) outbreak, their take-home pay may be different to usual.<\/p>\n\n\n\n

That could have implications for their tax bracket and entitlements that are due to them. If they don\u2019t understand their payslips, they could easily miss important details.<\/p>\n\n\n\n

So, how do you break down all the calculations, formulas and deductions in layman\u2019s terms?<\/p>\n\n\n\n

Simon Gibbs is the director of Lite Consulting, a consultancy firm that works with HR and payroll managers as they upgrade their systems to the cloud.<\/p>\n\n\n\n

Below, he talks about employees\u2019 changing expectations around payslips, and where those managing payroll processes are looking to improve their company\u2019s payslips.<\/p>\n\n\n\n

He also offers seven tips for you to improve the clarity of your company\u2019s payslips.<\/p>\n\n\n\n

1. Be clear on how your payroll team calculates pay<\/a><\/p>\n\n\n\n

2. Improve clarity around employer-paid benefits<\/a><\/p>\n\n\n\n

3. Use customisation for clarity around understanding payslips<\/a><\/p>\n\n\n\n

4. Digitalise your payslips<\/a><\/p>\n\n\n\n

5. Implement employee self-service functionality<\/a><\/p>\n\n\n\n

6. Plan ahead for leavers<\/a><\/p>\n\n\n\n

7. Add understanding payslips to your onboarding process<\/a><\/p>\n\n\n\n

Help for your employees to understand their payslips<\/a><\/p>\n\n\n\n

 <\/p>\n\n\n\n

1. Be clear on how your payroll team calculates pay<\/h2>\n\n\n\n

Gibbs points out that the most frequent payslip question from salaried employees is about how the payroll team calculates their pay.<\/p>\n\n\n\n

He says: \u201cOne of the big things that always confuses people is the hours that appear on a payslip are generally averaged across 12 months for salaried employees. A shorter month throws off their calculations.<\/p>\n\n\n\n

\u201cTheir payslip shows they\u2019ve been paid for working, say, 162 hours, but they\u2019ve actually only worked 130.\u201d<\/p>\n\n\n\n

Adding that detail to your salaried employees\u2019 payslips could slow down those types of enquiries.<\/p>\n\n\n\n

2. Improve clarity around employer-paid benefits<\/h2>\n\n\n\n

Another problematic area for understanding payslips is how the other elements of your employees\u2019 compensation is documented, such as for pensions.<\/p>\n\n\n\n

Gibbs says: \u201cThere are a lot of questions about what the employer pays and what they pay, in terms of how it\u2019s shown on the payslip. There are still a lot of payslips that don\u2019t cover all of the elements in enough detail.\u201d<\/p>\n\n\n\n

It\u2019s worth expanding this field on the payslip to include this itemization.<\/p>\n\n\n\n

3. Use customisation for clarity around understanding payslips<\/h2>\n\n\n\n

Gibbs says the standard payslip with basic pay information isn\u2019t enough for employees to get the full picture. Simple updates to your payslip template could make a difference in the volume of queries.<\/p>\n\n\n\n

He adds: \u201cI think there\u2019s a shift to a more customisable and bespoke payslip that fit the specific requirements of the company.<\/p>\n\n\n\n

\u201cInstead of just one template, HR managers should compare payslip layouts and details to see the many levels of detail that they can and should include.\u201d<\/p>\n\n\n\n

4. Digitalise your payslips<\/h2>\n\n\n\n

The most significant change that has happened to payslips is digitalisation, which is to your benefit in several ways.<\/p>\n\n\n\n

Gibbs says: \u201cDigitalizing has made it easier to create payslips because most software gives you a choice of templates that you can configure to what you think your business needs.<\/p>\n\n\n\n

\u201cNow you\u2019re able to put a narrative on a payslip much easier because it\u2019s electronic\u2014way easier than if it were pre-printed stationery.<\/p>\n\n\n\n

\u201cSo if you\u2019re getting a lot of queries about the average hours per month, for example, you can easily update your payslip to address that and stop those calls.\u201d<\/p>\n\n\n\n

5. Implement employee self-service functionality<\/h2>\n\n\n\n

Employee self-service functionality is critical when it comes to understanding payslips.<\/p>\n\n\n\n

In today\u2019s digital society, employees expect the same on-demand access to their payslips as they get in other areas of their lives.<\/p>\n\n\n\n

With payroll software<\/a>, you can create an FAQ for common questions about payslips that employees can access and review on-demand.<\/p>\n\n\n\n

This way, they can get immediate answers as they need them, and you don\u2019t have to spend time addressing the same questions repeatedly.<\/p>\n\n\n\n

6. Plan ahead for leavers<\/h2>\n\n\n\n

\u201cThe exit stage is still a challenge for organizations to find the right solution to make sure employees can access their payslips as they need to after they\u2019ve left the company,\u201d says Gibbs.<\/p>\n\n\n\n

\u201cThink about how a person will take their payslips with them when they leave.<\/p>\n\n\n\n

\u201cWhen a person leaves an organization, usually their access to the HR portal is turned off or left on for a short time. Both can confuse former employees in the end.<\/p>\n\n\n\n

\u201cSome organizations have a separate, third-party portal where they can upload the employee\u2019s final documents. But by doing that, you risk non-compliance with data compliance or GDPR because you end up with payslips in multiple places for multiple employees.<\/p>\n\n\n\n

\u201cFor me, it\u2019s a process that I recommend you give a lot of clarity and thinking through.\u201d<\/p>\n\n\n\n

7. Add understanding payslips to your onboarding process<\/h2>\n\n\n\n

This may seem like a no-brainer, but Gibbs says it\u2019s rarely even considered when mapping the employee experience.<\/p>\n\n\n\n

He adds: \u201cI don\u2019t think it\u2019s ever covered in an induction programme. I\u2019ve personally never had someone talk through my payslip with me.<\/p>\n\n\n\n

\u201cBut if we look at how payroll is processed, I have this view that a lot of organizations make it artificially complex. It doesn\u2019t need to be as complicated as it\u2019s made.<\/p>\n\n\n\n

\u201cOnce you simplify those processes, it will be easier to display distinctions such as single and double-time pay, holiday entitlement, and everything else.<\/p>\n\n\n\n

\u201cBecause the problem is people see things on their payslip and don\u2019t fully understand what they are. So, it\u2019s crucial to set those expectations right when they are joining, so those elements aren\u2019t confusing.\u201d<\/p>\n\n\n\n

Help for your employees to understand their payslips<\/h2>\n\n\n\n

To help your employees get clarity on the information that features in their payslips, we\u2019ve created a handy infographic below, so you can share the information with your workforce.<\/p>\n\n\n\n

Conclusion on understanding payslips<\/h2>\n\n\n\n

The payslip is a vital document for many reasons, and it\u2019s important for the sake of employee engagement that your employees clearly understand their compensation.<\/p>\n\n\n\n

This builds their trust in your company and their perceived value as an employee. It also saves you time by offering all the information they need upfront.<\/p>\n\n\n\n

Upgrading to payroll software inherently resolves the common problems with payslips through automation, customization, and smart data.<\/p>\n\n\n\n

Using it gives you the flexibility to create the kinds of payroll documents that are best suited for your business model, and to make updates quickly as needed.<\/p>\n\n\n\n

Gibbs concludes: \u201cThere needs to be automation within payroll. There needs to be connectivity with the relevant tax offices so you\u2019re always up to date with tax codes.<\/p>\n\n\n\n

\u201cThere is a such thing as static payroll where everyone gets the same amount every month. But that isn\u2019t the case for many businesses.<\/p>\n\n\n\n

\u201cAnd even in those cases, automation is crucial to make the job easier.\u201d<\/p>\n\n\n\n

 <\/p>\n\n\n

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Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Understanding payslips can be confusing for employees. Follow these tips to make things clearer for them and save time for your payroll team.<\/p>\n","protected":false},"author":281,"featured_media":8038,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_is_cornerstone":"","_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_opengraph-image":"","_yoast_wpseo_opengraph-image-id":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_yoast_wpseo_twitter-image":"","_yoast_wpseo_twitter-image-id":"","_yoast_wpseo_schema_page_type":"","_yoast_wpseo_schema_article_type":"","_sage_video":false,"_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_primary_category":"","sage_membership_post_content_type":"article","sage_membership_post_featured_video_id":"","sage_membership_post_video_type":"trailer","sage_membership_post_featured_video_duration":"","post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[7],"tags":[],"business_type":[3],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[61],"coauthors":[346],"class_list":["post-7813","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","business_type-small-business"],"sage_meta":{"region":"en-ca","author_name":"Ashley Thompson","featured_image":"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1159610631.jpg","imagine_tags":{"61":"Payroll software"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/7813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/281"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/comments?post=7813"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/7813\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media\/8038"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=7813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/categories?post=7813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=7813"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/business_type?post=7813"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/lilypad?post=7813"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/context?post=7813"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/industry?post=7813"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/persona?post=7813"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/imagine_tag?post=7813"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/coauthors?post=7813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}