Padding is used to add margins around the children of a slice. This is most noticeable for child slices that are set to "Fill Parent", but it applies to all child slices no matter how they are attached to the current slice.

Positive padding reduces the effective size of the slice (and Top/Left padding also moves its effective position down/right) for all purposes of positioning and sizing its children.

Padding is also allowed to be negative, which increases the effective size, causing child slices to overflow the parent slice when set to Fill.

Padding for Grid slices acts slightly differently: padding is added around each grid cell rather than around the outer edges of the grid.