Self-employed payslip guide – How to make one and detailed FAQ

For self-employed individuals in the UK, understanding the ins and outs of financial documentation is crucial for both legal compliance and personal record-keeping. While payslips are not a legal requirement for the self-employed, creating a payslip for personal earnings can be beneficial for various reasons, including loan applications, mortgage agreements, and personal financial planning.


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This guide provides a comprehensive overview of how to create a payslip if you’re self-employed and answers some frequently asked questions regarding the process.

Why create a payslip if you’re self-employed?

Although not legally required, self-employed individuals may find creating a payslip useful for:

  • Proof of income: Lenders and landlords often require evidence of income, and a payslip serves as an official document detailing your earnings.
  • Tax preparation: Regularly documenting your income can simplify tax filing, ensuring you have a clear record of your earnings over the financial year.
  • Financial management: Keeping track of income and deductions on a payslip helps in budgeting and financial planning.

How to create a self-employed payslip

Creating a payslip involves detailing your income and any deductions. Here’s a simple step-by-step process to create one:

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Step 1: Choose a format

Start by choosing a format. You can create a payslip using a template from software like Microsoft Excel or Google Sheets, or utilise dedicated payroll software that offers more advanced features, including automatic calculations and tax updates.

Step 2: Include personal and business information

Your payslip should include the following information:

  • Your name and address
  • Your business name and address (if different)
  • The period the payslip covers
  • Your Unique Taxpayer Reference (UTR) number

Step 3: Detail your earnings

List all sources of income for the period the payslip covers. This could include income from sales, services provided, and any other earnings. Total these to reflect your gross income.

Step 4: Deduct expenses and taxes

Subtract any business expenses and applicable taxes from your gross income. This might include:

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  • National Insurance contributions
  • Income tax
  • Pension contributions
  • Any other relevant deductions

After deductions, what remains is your net income, which should be clearly shown on the payslip.

Step 5: Finalise and store securely

Once completed, review the payslip for accuracy. It’s advisable to store your payslips securely, either digitally with encryption or physically in a safe location, for future reference or proof of income.

Self-employed payslip template

Creating a payslip for self-employed earnings can be streamlined by using a template. Below is a simple template that you can customise according to your specific needs. This template is designed for use in spreadsheet software like Microsoft Excel or Google Sheets, where calculations can be automated.

Template overview

  • Personal Information
    • Name:
    • Address:
    • Contact Information:
  • Business Details
    • Business Name:
    • Business Address:
    • Unique Taxpayer Reference (UTR) Number:
  • Payslip Information
    • Payslip Date:
    • Period Covered:


DescriptionAmount (£)
Services Provided
Other Income
Total Earnings


DescriptionAmount (£)
National Insurance
Income Tax
Pension Contributions
Other Deductions
Total Deductions

Net income

DescriptionAmount (£)
Total Earnings
Less: Total Deductions
Net Income

How to use the template

  1. Fill in Personal and Business Details: Begin by entering your personal and business details, including the period the payslip covers.
  2. Document Your Earnings: Under the ‘Earnings’ section, list all your income sources for the period and calculate your total earnings.
  3. Record Your Deductions: In the ‘Deductions’ section, itemise all expenses and deductions, such as National Insurance contributions, income tax, and calculate your total deductions.
  4. Calculate Net Income: Subtract the total deductions from your total earnings to find your net income, which is what you take home after deductions.
  5. Review and Save: Double-check all entries for accuracy, then save the document securely for your records.

This template is a basic structure to help you start recording your payslip details. Depending on your specific financial situation, you may need to adjust or add more categories.

Self employed payslip FAQ

Is creating a payslip mandatory for self-employed individuals?

No, it’s not a legal requirement, but it is beneficial for personal record-keeping and financial management.

Can I use any software to create a payslip?

Yes, any spreadsheet software like Excel or Google Sheets can be used, or you can opt for dedicated payroll software for more advanced features.

What should I do if my income varies each month?

For fluctuating incomes, create a payslip for each period you wish to document, reflecting the actual earnings and deductions for that period.

How often should I create a payslip?

This depends on your needs and the regularity of your income. Monthly payslips are common, but you might choose a different frequency based on your business model.

Do I need to submit my payslips to HMRC?

No, payslips are for your records. However, you must declare your income through the Self Assessment tax return process.

The importance of accuracy and considering professional payroll services

When it comes to financial documentation and record-keeping, accuracy is paramount. Incorrect information on a payslip can lead to a multitude of problems, from inaccuracies in tax filings to issues with loan or mortgage applications.

Ensuring that your payslips accurately reflect your income and deductions is crucial for maintaining the integrity of your financial records and complying with legal requirements.

Why accuracy matters

  • Tax compliance: Accurate payslips ensure that you are paying the correct amount of tax and National Insurance contributions, avoiding potential fines and penalties from HMRC.
  • Financial planning: Precise records are vital for effective budgeting and financial planning. Inaccuracies can lead to misguided decisions based on incorrect financial information.
  • Loan and mortgage applications: Lenders scrutinise your financial documentation closely. Inaccuracies on payslips can lead to declined applications or less favourable terms.

Given the importance of accuracy, self-employed individuals should consider whether they have the necessary expertise and time to dedicate to this task. For those who find this aspect of their business challenging or time-consuming, hiring a professional payroll service may be a wise investment.

The benefits of professional payroll services

  • Expertise: Professional payroll providers are experts in their field, ensuring that your payslips and other financial documents comply with current regulations and laws.
  • Time-saving: Outsourcing payroll tasks frees up your time, allowing you to focus on core business activities.
  • Peace of mind: Knowing that professionals are handling your payroll can reduce stress and give you confidence in the accuracy of your financial records.
  • Advanced features: Many payroll services offer additional features, such as automatic tax updates, digital payslip access, and integrated financial reporting.

When to consider hiring a professional payroll service

  • Complex financials: If your income streams and deductions are complex, a professional can help navigate these intricacies more efficiently.
  • Growth phase: As your business grows, the time and expertise required for payroll tasks may exceed what you can manage alone.
  • Regulatory changes: Keeping up with changes in tax laws and financial regulations can be challenging. A payroll service can ensure you remain compliant.
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