Correct spelling, explanation: underlying is a word that can cause spelling problems, mainly because the original version looks a little bit different than the derivation: it’s the verb underlie. In addition, it’s very similar to another: underlay. You should remember that when creating the present participle of the verb underlie, you not only add the -ing suffix but also change lie to ly. Therefore, the only correct form is underlying, not underlaying.

Definition of underlying:
1. verb (present participle), to be the foundation, cause, or basis of
Many facts underlie my decision.
I don’t know what principles underlie your educational methods.
2. adjective, lying or situated under something
The currents are affected by the shape of the underlying rocks.
Your pain may be rooted in problems with unsung and underlying muscles you’ve probably never heard of.

Collocations with underlying:
Some most commonly used collocations include: underlying structure and underlying assumption.
The prescribed entries are used to characterize the underlying structure.
The underlying assumption that cheaper energy is good for global growth still stands.

Incorrect spelling, explanation: the word underlaying shouldn’t be confused with the similar one – underlying. Their structures are very similar, so it’s easy to make a mistake. Both consist of two parts: the prefix under- and the present form of the verb. Underlaying comes from the word lay, while underlying comes from the word lie. It is very important to remember to distinguish them.