The Pay As You Earn (PAYE) system is a method of paying income tax and national insurance contributions. Your employer deducts tax and national insurance contributions from your wages or occupational pension before paying you your wages or pension.
HMRC have guidance on their website on how you pay income tax.
Pension
A pension is a regular payment put aside throughout a person’s working life, in order to be used during retirement. They can come in many forms, such as a state pension (paid by the Government), a company / employer pension (with contributions typically made by both employee and employer) and private pensions, which you would set up yourself with an investment company.
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