Payslips and Deductions

National Curriculum Alignment

This lesson supports the English National Curriculum for Key Stage 3 (Year 9) under the Business, enterprise and citizenship section, developing financial capability and understanding of personal finances—including pay, deductions, and tax responsibilities—as recommended in the curriculum to prepare pupils for real-world business and economic contexts.

Additionally, this lesson aligns with the WJEC/Eduqas GCSE Business Studies specification focusing on Theme 1.1 Introduction to Business and Theme 2.2 Finance, specifically addressing personal finance and income deductions.

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Learning Objectives

By the end of this 60-minute lesson, students will be able to:

1. Define key terms: payslip, gross pay, net pay, National Insurance, income tax, tax codes.
2. Identify and explain common deductions on a payslip, including National Insurance and income tax.
3. Analyse sample payslips to calculate net pay from gross pay and deduct appropriate amounts.
4. Understand the purpose and importance of tax codes in payroll.
5. Demonstrate awareness of the link between payslips, taxation, and personal finance management.

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Resources

• Printed handouts of simplified, dyslexia-friendly sample payslips (with colour coding and icons).
• Whiteboard or interactive whiteboard.
• Markers or digital annotation tools.
• Glossary sheet of key terms using dyslexia-friendly fonts (e.g., OpenDyslexic or Arial).
• Calculators (optional but useful for some learners).
• Extension task sheets for advanced learners exploring tax code meanings.
• Visual aids: diagram showing the flow from gross pay to net pay.
• Timer or clock to manage activities.

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Lesson Structure

Starter (10 minutes)

Engagement & Vocabulary Introduction

• Begin with a quick whole-class quiz on terms related to pay and deductions using a “Think-Pair-Share” method: ask “What do you think a payslip shows? What is gross pay vs. net pay?”
• Introduce and display definitions on the whiteboard of key terms: payslip, gross pay, net pay, National Insurance, income tax, and tax codes.
• Use a simplified payslip visual to point out where these terms appear.
• Provide students with a glossary sheet in a dyslexia-friendly format.

Teacher differentiation:

• For dyslexic learners, use colour-coded terms and symbols next to definitions (e.g., coins for pay, scissors icon for deductions).
• Pair less confident readers with stronger peers for support.

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Main Activity (35 minutes)

Part 1: Explaining Payslips and Deductions (15 mins)

• Walk through a sample payslip projected on the board, highlighting:
  • Gross pay (total earned before deductions)
  • Income tax deduction (explaining the concept of tax bands)
  • National Insurance contribution (why it’s deducted)
  • Tax code explanation (basic meaning, e.g., standard 1257L)
  • Net pay (final amount after deductions)

Tip: Use relatable examples (e.g., a part-time job or an allowance analogy) to anchor understanding.

Teacher differentiation:

• Provide printed notes summarising each deduction with bullet points.
• Use visual chunking to avoid overwhelming information.

Part 2: Payslip Analysis Activity (20 mins)

• Distribute 3 different sample payslips to small groups (mixed ability). Each slip varies by pay amount and tax codes.
• Task: Identify gross pay, list deductions, calculate net pay, and infer what the tax code suggests about the individual’s tax-free allowance.
• Groups record their findings on a worksheet (dyslexia-friendly font, structured boxes for answers).
• Circulate and support groups, particularly those who may struggle with calculations or reading.

Differentiation:

• Scaffolding cards with step-by-step instructions for less confident students.
• Calculators allowed upon request.
• Dyslexic learners benefit from simplified payslips that use larger font and visuals.

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Extension Activity for Advanced Learners

• Provide an extra worksheet with complex tax codes (e.g., K codes, emergency tax codes) for students to research their meanings and effects on pay.
• Challenge: Write a brief explanation of how tax codes affect deductions and what might cause a change in tax code.
• Encourage use of classroom resources or prior knowledge; expect concise summaries or presentations in next lesson.

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Plenary (10 minutes)

• Class discussion: “Why is it important to understand your payslip?”
• Quick formative assessment: use mini whiteboards or show of hands to answer multiple choice questions on deductions and pay concepts.
• Students write one new thing they learned on a sticky note and place it on the board.

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Assessment & Feedback

• Monitor group payslip analysis worksheets to assess understanding of deductions and calculations.
• Use verbal questioning throughout the lesson to gauge comprehension.
• Collect exit sticky notes to identify misconceptions or gaps.
• Extension activity responses provide insight into deeper understanding of tax codes.

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Differentiation Summary

Learner Group	Strategies
Dyslexic learners	Dyslexia-friendly handouts (coloured overlays, simple fonts), paired work, visual aids.
Low-confidence readers	Glossary with symbols, chunked instructions, peer support, calculators provided.
Advanced learners	Extension tax code research, analytical writing, peer teaching opportunities.
Mixed ability groups	Varied complexity of payslips, scaffolding cards, teacher support during group work.

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Teacher Reflection Tips

• Note which tax code explanations caused confusion and prepare to revisit these next lesson.
• Adjust complexity of payslip samples based on class progress.
• Consider inviting a local payroll professional or tax advisor for a future talk to deepen real-world links.

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By embedding financial literacy early within a business curriculum, this lesson equips pupils with essential life skills preparing them for further study and work, while fully adhering to the national and WJEC specification requirements.