How to create itemised pay statements

All employers must provide a statement of gross pay and deductions

Employers, however small, must provide employees with a detailed statement of gross pay and deductions – itemised pay statements – whenever they receive their wage or salary. This statement is in addition to, and separate from, the written particulars of employment.

Failure to provide proper itemised pay statements can result in you having to pay compensation to employees. Dismissing an employee for seeking to enforce rights to itemised pay statements will leave you open to a complaint of unfair dismissal at an industrial tribunal.

Employees covered

Nearly all employees are entitled to itemised pay statements, with few exceptions. The main exceptions are:

  • Anyone who is not an employee, for example an independent contractor or freelance agent;
  • Anyone in the police service; and
  • Merchant seamen and “share” fishermen.

Timing and content

Itemised pay statements must be given to employees before the wages are paid or at the same time, eg weekly or monthly.

Legislation also specifies what information must be contained in itemised pay statements. This is:

  • Gross pay;
  • All fixed deductions and their individual reasons (or the total figure and a ‘standing’ breakdown – see below);
  • All variable deductions and their individual reasons; and
  • Net pay.

If wages are paid to an employee by more than one means – for example, some in cash (or a cheque) and some direct to a bank – the methods of payment and the amount of net pay for each method must be included in itemised pay statements.

Standing deductions

An employer can either issue a pay statement that specifies the amounts and purposes of every fixed deduction or one that specifies only the aggregate amount of all fixed deductions plus a “standing statement of fixed deductions”.

Where an employer chooses to make a standing statement of fixed deductions, the total of fixed deductions must still be shown on the normal regular itemised pay statement.

The standing statement merely breaks this total down.

Legislation requires that a standing statement of fixed deductions must:

  • Be in writing;
  • Be re-issued at least every 12 months; and
  • State for each item deducted: the amount; the interval between deductions; and the purpose (eg union subscription, charity giving).

The statement must be given to the employee before, or at the same time as, the first itemised pay statement which the standing statement explains.

An employee must be notified of any change(s) which affects the standing statement of fixed deductions – such as a new deduction, cancellation of a deduction or change in the level of one or more amounts deducted.

In this case, the employer can either:

  • Give the employee a written notification of the change(s); or
  • Issue an amended full standing statement (which is then valid for up to 12 months).

Complaints and compensation

An employee may complain to an industrial tribunal if an employer fails to provide itemised pay statements as required. If itemised pay statements have been issued, but there is a dispute over what items should have been included, the employer or employee can apply to an industrial tribunal to adjudicate.

A tribunal can award compensation to an employee, payable by the employer, if it finds that deductions have been made from wages which were not properly specified in an itemised pay statement (or statement of fixed deductions). The amount of compensation awarded cannot be more than the total of wrongful deductions in the 13 weeks before the tribunal application.


It does not matter whether the deductions were legitimate: compensation is awarded on the basis of lack of notification.

Employers, cannot of course, dismiss employees for seeking to enforce rights to itemised pay statements. An employee dismissed in this way is entitled to make a complaint of unfair dismissal, whether or not he or she had any rights to the statements or whether these rights were infringed.


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