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Tax and payroll

PAYE

Pay As You Earn: the UK system where your employer takes income tax and National Insurance out of your pay before you receive it, and passes it to HMRC. Your tax code (such as 1257L) tells them how much to take. "A PAYE role" simply means a normal salaried job.

A plain-English explanation, not financial or tax advice. Rules and rates change, so check your own situation. For free, impartial guidance, try MoneyHelper. Disclaimer.

You'll hear it as

Is that a PAYE role or a contract?

Why it matters to you.

When you compare a salary with a contractor's day rate, compare what lands in your account after tax, not the headline numbers. And check the tax code on your payslip: a wrong one means the wrong tax.

Related terms.

Videos.

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