Checking your pay slip is the best way to make sure you get the pay you deserve. It's worth taking a few minutes each payday to check your pay slip. It's a small amount of time to make sure your pay is paid correctly.
Why check your pay slip?
A payslip is not just a list of numbers, it's important proof that you're being paid correctly and fairly for your work. It can help you make sure that your pay is in line with your contract and, if you are a civil servant, with your collective agreement. It is also worth checking that all the allowances you are entitled to are paid correctly and that your employer has made the legal deductions.
Mistakes can happen to anyone. They can be human or computer-related. Regular checking will help you spot errors early and avoid nasty surprises later.
How to check your pay slip
1. Compare the salary with the employment contract or the provisions of the collective agreement.
Check that the monthly or hourly rate is what was agreed. If there are conditions attached to the salary, such as commissions, additional allowances or personal allowances, these should also be itemised in the pay slip. Also check that agreed pay increases are paid at the right time.
2. Check your working hours.
Check the hours worked on the pay slip and compare them with your own timesheet. Incorrectly recorded hours are the most common cause of payroll errors. The pay slip should show how many hours have been worked and the hourly rate of pay. For monthly employees, it is usually easy to check the hours worked.
3. Check your allowances and compensations.
Overtime, evening and Sunday allowances, holiday pay and travel expenses - all of these must be included in the salary and in accordance with the contract. Any fringe benefits, such as car or telephone allowances, should also be itemised.
4. Check the deductions and the tax rate.
Compare the withholding rate with your tax card and make sure that statutory contributions such as occupational pension and unemployment insurance have been deducted from the salary.
5. Compare the totals.
The total should match the net salary paid into the account. If the total does not match, check the lines again.
What should the pay slip contain?
The pay slip should be easy to understand and easy to check whether the salary and its components have been paid correctly. For example, overtime pay should separately identify overtime hours worked at different levels of compensation (50%, 100%) so that the employee can check whether overtime has been paid correctly and in accordance with the contract. Collective agreements may contain provisions on pay which may affect the breakdown of pay to be given to civil servants.
The pay slip should show at least the following information:
- the name and contact details of the employer and the employee
- date and period of payment
- the name and date of the employer and the date and time of payment
- any allowances and supplements paid
- hours worked and overtime, if any
- deductions (tax rate, contributions to occupational pension, unemployment and sickness insurance)
- the net salary payable, i.e. the amount to be credited to the account
- withholding tax payable to the tax authorities
- the basis on which the salary is determined, such as types of salary and accruals
- holiday pay and holiday allowances paid in connection with the payment of wages and salaries
- payroll withholding tax paid for the previous calendar year, the current calendar year and the last pay period
A clear pay slip makes the value of your work visible and helps to ensure that your pay has been calculated correctly.
What do the terms in the payslip mean?
Understanding these payroll terms will make it easier to read your pay slip.
Gross pay: total pay before tax and statutory deductions.
Net pay: the amount remaining in the account after all deductions.
Withholding tax: the proportion of tax withheld from your salary.
Employment pension contribution (Tyel/JuEL): Statutory pension contribution levied on the employee.
Unemployment insurance contribution: Contribution levied to finance unemployment protection.
Daily sickness insurance contribution: Contribution to the financing of sickness insurance levied in the context of withholding tax.
Shift premium: A supplement paid under a collective agreement for, for example, evening and night shifts.
Overtime pay: A bonus paid for the part of the working time exceeding the agreed working time.
Benefit in kind: A benefit included in pay, such as a car or telephone allowance, which is valued in cash.
Type of pay: Specifies the type of payment (e.g. hourly, monthly, task and personal performance-related, bonus).
What are the most common payroll errors?
The same mistakes are frequently made in pay slips, and these are the ones that deserve the most attention when reviewing a pay slip.
Common errors include incorrectly recorded hours worked, missing allowances or overtime, missing expense reimbursements and ambiguities in commission payments.
This article was written by Petteri Halvari, Pro's Contracts Officer, and Ari Komulainen, Senior Legal Adviser.