PAYE (Pay As You Earn) is calculated based on an employee's gross income and applicable tax rates, which can vary by country. The employer deducts a portion of the employee's earnings for income tax, as well as national insurance or social security contributions, if applicable. Deductions are typically based on the employee's tax code and any personal allowances they may be entitled to. The resulting amount is reflected on the payslip as the net pay after all deductions.
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