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First UK Job: The Complete Earning Guide
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First Job And Earning Uk
TL;DR
Starting a first UK job involves PAYE tax, National Insurance, auto-enrolment pension, statutory holiday, sick pay, and other employee rights. This guide covers the payslip, tax codes, payment setup, and the first-month checklist.
Key facts
- Personal Allowance GBP 12,570 for 2026/27.
- NI Class 1 employee 8% on earnings GBP 12,570-50,270.
- Auto-enrolment from age 22 if earning above GBP 10,000.
- Statutory holiday 5.6 weeks per year.
- SSP GBP 116.75/week (2024/25) for up to 28 weeks.
- Statutory minimum notice typically 1 week initially.
- P45 from previous job or starter checklist.
- Bank account needed for salary payment.
Starting a first UK job
Starting a first UK job introduces a new earner to several systems running in parallel: PAYE tax collection, National Insurance, auto-enrolment pension, statutory holiday, sick pay, and the framework of employment rights under the Employment Rights Act 1996. The transition from student or unemployed status to full-time earner shapes household finances and tax position.
This guide walks through the first-job essentials: registering for tax through the starter checklist or P45, the payslip components, the auto-enrolment pension setup, holiday and sick pay entitlements, and a first-month checklist for the new employee.
The starter process and tax code
On starting a new job the employee provides either a P45 from a previous UK employment (if applicable) or completes a Starter Checklist (replacing the older form P46). The starter checklist asks the employee's situation: is this your only job, do you have another, are you a student loan borrower, etc.
The employer uses the information to set the initial tax code. Common starter codes: 1257L cumulative (standard, only job, with P45), 1257L M1 (emergency, only job, no P45), BR (second job or no allowance), 0T (no PA, full rates).
The first payslip applies the chosen tax code. Where the code is emergency (M1 or W1), each pay period stands alone for calculation - producing over-tax in early months that is corrected once HMRC issues a cumulative code from the first RTI submission.
Worked example:
A graduate starts their first job in September 2026 at GBP 28,000 salary. They complete the starter checklist ticking 'only job since 6 April'. The employer sets 1257L M1 (emergency). The first October payslip applies one-twelfth of the GBP 12,570 PA to October's pay of GBP 2,333. Tax around GBP 257. HMRC sees the RTI; issues cumulative 1257L code; November pay applies year-to-date allowance retroactively and produces a tax refund through PAYE.
Reading the first payslip
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The payslip shows: gross pay (basic salary plus any overtime, bonus, or allowances), pre-tax adjustments (salary sacrifice into pension if elected), taxable pay, income tax deducted, employee NI deducted, pension contribution, net pay. Year-to-date totals appear on the right side.
For a first job starter on GBP 28,000 in September: gross monthly pay GBP 2,333, income tax around GBP 257 (after PA), employee NI 8% on the slice above the PT = around GBP 105, auto-enrolment pension contribution (if enrolled) 5% of qualifying earnings = around GBP 90, net pay around GBP 1,881.
Section 8 of the Employment Rights Act 1996 requires the payslip to show gross pay, the amount and reason for every deduction, the net pay, and the method of payment. Where any line is unclear, the payroll team should be able to explain the calculation.
Practical action:
Keeping the first payslip and a screenshot of the PTA showing the active tax code provides the baseline for any later queries. Where the figures look wrong (large unexplained deductions, wrong tax code), prompt query to payroll typically resolves quickly.
National Insurance and your earnings
Class 1 employee NI applies to earnings above the Primary Threshold (GBP 12,570 annual / GBP 1,048 monthly). The rate is 8% on earnings between PT and the Upper Earnings Limit (GBP 50,270 / GBP 4,189 monthly), then 2% above. The 2024 rate cut from 12% to 8% applies to all monthly pay runs from April 2024 onwards.
NI is non-cumulative: each pay period stands alone. A bonus month attracts 8% on the bonus amount where the year-to-date is still below UEL. Once UEL is crossed in the cumulative annual position, the 2% rate applies on the slice above.
NI builds State Pension entitlement. Earnings above the Lower Earnings Limit (GBP 6,500 annual / GBP 542 monthly) accrue a qualifying year for State Pension purposes, even where the actual NI charge is small or zero (between LEL and PT). 35 qualifying years are needed for the full new State Pension.
Worked example:
A starter on GBP 28,000 salary pays NI at 8% on (28,000 - 12,570) = GBP 1,234/year. Monthly NI around GBP 103. Combined with income tax of around GBP 3,086, the total deductions are GBP 4,320/year. Take-home before pension contribution around GBP 23,680, or GBP 1,973 monthly.
Auto-enrolment pension
Auto-enrolment under the Pensions Act 2008 requires employers to enrol eligible jobholders into a qualifying pension scheme. Eligibility: age 22 or above, below State Pension Age, earning above the earnings trigger of GBP 10,000/year. Below age 22 or below the earnings trigger, the employee can opt in voluntarily.
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Total minimum contribution 8% of qualifying earnings (3% employer + 5% employee inc tax relief). Qualifying earnings are the slice between LEL (GBP 6,240) and UEL (GBP 50,270). Some employers use different bases (basic pay, total pay) under certification rules. The contribution starts after a 'staging' or 'postponement' period of up to 3 months.
The pension provider sets up the account; the contractor receives joining information showing the pension fund choice and the contribution flow. Most employees stay in the default fund (typically a lifestyle or target date fund managed by the pension provider). Active fund choice is available through the provider's portal.
Opt-out: the employee can opt out within the first month of enrolment for a full refund of contributions. After the first month, opt-out is possible but the contributions made stay in the pension. The pension is portable - transfers to future employers or personal SIPPs preserve the value.
Holiday, sick pay, and other entitlements
Statutory holiday entitlement under the Working Time Regulations 1998 is 5.6 weeks per year (28 days for a 5-day week, pro-rata for part-time). Bank holidays may be included in the 28 days or separately granted at employer discretion. The first year's allocation is typically accrued pro-rata based on start date.
Statutory Sick Pay at GBP 116.75/week (2024/25; check current) applies after 4 consecutive days of sickness (the 'qualifying days') up to 28 weeks. Many employers operate enhanced sick pay (full salary for some weeks, half pay for further weeks) above the SSP minimum.
Statutory minimum notice: 1 week's notice during the first month of employment, increasing with continuous service to a minimum of 1 week per year of service (capped at 12 weeks). Employers typically specify longer notice in the contract.
Other entitlements through statute: parental rights (maternity, paternity, adoption, shared parental leave), unpaid carer's leave (1 week per year from April 2024), bereavement leave, time off for dependants, family-friendly flexible working request rights.
The first month checklist
- Bank account: salary must be paid into a UK bank account. Most employees use their existing personal current account; a new bank account can be opened in advance if needed. The HR team requests the sort code and account number; the first salary payment lands by the employer's standard pay date (typically end of month or specific day each month).
- Tax code verification: check the tax code on the first payslip against the expected code. Standard 1257L for a first job in the tax year, S1257L for Scottish residents, C
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