We explain how to check your UK tax code and what the different tax codes mean.
Your tax code is a simple series of numbers and letters which your employer or pension provider use to work out how much income tax to take from your wages or pension.
You may be on the wrong tax code for a number of reasons. It’s important to check because being on the wrong tax code could mean you are owed money or owe money to HMRC.
In this article, we cover:
- How do I check my tax code?
- What does my tax code mean?
- Why has my tax code changed?
- Will get a tax refund if my code is wrong?
Read more: Use our income tax calculator to work out your take-home pay.
What is a tax code?
Your tax code tells your employer or pension provider how much to take in income tax from your wages or pension.
HMRC issues a tax code to everyone on the PAYE (pay as you earn) system. You don’t choose your own code.
PAYE is simply a way for HMRC to collect your income tax and national insurance directly from your pay as you go along, rather than through an annual tax return that you sort out yourself.
Part-time and full-time workers, plus those who receive a private pension will therefore have a tax code. You will not have a tax code if you are fully self-employed because all your income is taxed through self-assessment.
If you’re on the wrong tax code, you could be paying too little or too much tax. It is your responsibility, not your employer, to pay back any money you owe to HMRC.
How do I check my tax code?
There are a number of places that you can find your tax code:
- Your payslip
- P45 – the form you get from your employer when you leave your job
- P60 – your annual tax review from your employer
- A dedicated page on the gov.uk website – you’ll need to sign in to or register for a government gateway ID
- HMRC’s app
- On a “tax code notice” letter from HMRC if you get one
- The HR department at your work
- Your pension advice slip
What are the different tax codes?
A tax code is a combination of numbers and letters. The numbers in a tax code represent the tax-free earnings you are entitled to in a particular pay period.
Most people who pay tax in the UK are entitled to a personal allowance. This is currently £12,570 per year for the 2023/2024 tax year. If you have no other income, you can earn up to this amount without having to pay any tax.
This figure may be higher if you claim marriage allowance or blind person’s allowance. However, you will not get any personal allowance if you earn more than £125,140 a year.
Anyone who has just one job or pension and who earns less than £100,000 a year (and has no taxable employment perks such as a company car), will usually have the standard tax code of 1257L.
The income tax that you need to pay is then calculated by your employer on the balance over your tax-free allowance.
England and Northern Ireland PAYE tax rates 2023/2024:
| PAYE tax rate | Rateoftax | Annual earnings the rate applies to (above the PAYE threshold) |
| Basic tax rate | 20% | Up to £37,700 |
| Higher tax rate | 40% | From £37,701 to £125,140 |
| Additional tax rate | 45% | Above £125,140 |
The PAYE tax rates for England and Northern Ireland in the 2023/2024 tax year are as follows:
Basic tax rate: 20%, annual earnings of up to £37,700
Higher tax rate: 40%, annual earnings from £37,701 to £125,140
Additional tax rate: 45%, annual earnings above £125,140
Scotland PAYE tax rates 2023/24:
The standard employee personal allowance for the 2023 to 2024 tax year is:
- £242 per week
- £1,048 per month
- £12,570 per year
| PAYE tax rate | Rateoftax | Annual earnings the rate applies to (above the PAYE threshold) |
| Starter tax rate | 19% | Up to £2,162 |
| Basic tax rate | 20% | From £2,163 to £13,118 |
| Intermediate tax rate | 21% | From £13,119 to £31,092 |
| Higher tax rate | 42% | From £31,093 to £125,140 |
| Top tax rate | 47% | Above £125,140 |
The PAYE tax rates for Scotland in the 2023/2024 tax year are as follows:
Starter tax rate: 19%, up to £2,162
Basic tax rate: 20%, from £2,163 to £13,118
Intermediate tax rate: 21%, from £13,119 to £31,092
Higher tax rate: 42%, from £31,093 to £125,140
Top tax rate: 47%, above £125,140
Wales PAYE tax rates 2023/24:
The standard employee personal allowance for the 2023 to 2024 tax year in Wales is:
- £242 per week
- £1,048 per month
- £12,570 per year
| PAYE tax rate | Rateoftax | Annual earnings the rate applies to (above the PAYE threshold) |
| Basic tax rate | 20% | Up to £37,700 |
| Higher tax rate | 40% | From £37,701 to £125,140 |
| Additional tax rate | 45% | Above £125,140 |
The PAYE tax rates for Wales in the 2023/2024 tax year are as follows:
Basic tax rate: 20%, up to £37,700
Higher tax rate: 40%, from £37,701 to £125,140
Additional tax rate: 45%, above £125,140
What does my tax code mean?
The letters at the end of your tax code relate to your situation and how it affects the amount that you can earn tax-free.
There are also additional letters at the front if you live in Scotland (S) or Wales (C), such as S1257L or C0T.
Here’s what the letters mean:
- L = you are entitled to a tax-free personal allowance
- BR = usually for a second job or pension where you are entitled to no personal allowance because it is assumed that it is already being used on your main job. You will need to pay 20% basic-rate tax on the whole amount. Make sure that you inform HMRC which is your main job.
- D0 = As above but all income is taxed at the 40% higher rate (21% intermediate rate in Scotland)
- D1 = As above but all income is taxed at the 45% additional rate (41% higher rate in Scotland)
- 0T = you are not entitled to any tax-free personal allowance and your income is taxed in line with income tax bands, e.g. you earn more than £125,140 (see below)
- SD2 = Only used in Scotland, usually for a second job or pension.You’re not entitled to any tax-free personal allowance and all income is taxed at the top rate of 46%.
- K = You have a negative personal allowance, e.g. you might be paying back tax that you owe from a previous year or receiving taxable work benefits which are worth more than (or you’re not entitled to) the personal allowance
- M or N = If you or your spouse/civil partner have received (M) or been given (N) the marriage tax allowance. Non-taxpayers are able to transfer £1,260 of their personal allowance to their basic-rate tax-paying spouse or civil partner.
- NT = No tax is paid on the work or pension income.
- T = Typically for more complex tax affairs, which need to be reviewed by HMRC. If a T follows a number that isn’t zero, you will be entitled to a personal allowance of that figure.
What about emergency tax codes?
You might notice letters and numbers such as W1, M1 or X after your tax code on your payslip. For example, your tax code might be:
- 1257L W1 if you are paid weekly
- Or 1257L M1 if you are paid monthly
- Or an X might be used if you pay isn’t standard
These are all emergency tax codes.
HMRC will automatically put you on an emergency tax code when it doesn’t have accurate details about how much tax you need to pay. For example, if you have just started a new job.
Depending on what information the tax office has about you, you will pay tax:
- Just on the amount that exceeds the personal allowance (£12,570 in 2023/24)
- At 20% basic rate of tax on your entire pay packet if HMRC believes you have no personal allowance (BR tax code)
- At 40% higher rate on your entire pay packet (OT tax code)
It’s likely that your tax code will only be different for a short amount of time. This is a temporary measure until HMRC gathers the required information from your employer about how much you are earning. HMRC will adjust your code accordingly, once it has this information.
If your change in circumstances means you have not paid the right amount of tax, you will stay on the emergency tax code until you’ve paid the correct tax for the year.
Why have I been put on an emergency tax code?
There are a number of reasons why you might be paying emergency tax, including:
- Starting a new job
- Recently moving from being self-employed to employed
- Starting or stopping receiving benefits from your job
- Receiving taxable state benefits
- Claiming marriage allowance or expenses that you get tax relief on
You might find that you are paying more tax than necessary if you have been given an emergency tax code that excludes the £12,570 personal allowance, such as BR.
If this is the case you will be losing tax relief on that amount. In the 2023/24 tax year you could be paying extra depending on your income:
- Basic-rate taxpayers 20% (up to £37,277)
- Higher-rate taxpayers 40% (from £37,701 to £125,140)
The additional rate tax band is from above earnings of £125,140, after which you will pay an additional rate of tax at 45%.
However, due to a quirk in the system, anyone earning more than £100,000 begins to steadily lose the £12,570 personal allowance by £1 for every £2 they earn above that figure.
At £125,140, you lose the tax-free personal allowance altogether.
What are the tax codes and rules for students?
If you’re a full-time student with a part-time job then you might need to pay income tax and national insurance.
If you earn more than £190 a week then you will have to pay national insurance. You also have to pay income tax if you earn more than £1,042 a month, or £12,570 a year, which is yourpersonal allowance.
Your employer will usually deduct both income tax and national insurance from your wages through pay as you earn (PAYE).
But if you only work during the holidays then it’s possible that you won’t pay tax through PAYE. Instead, your employer will probably need to fill out a form called P38.
This only applies if the following conditions are met:
- You are a full-time student in the UK who only works during the holidays
- You are returning to full-time education after the holiday
- Your total income for the year is below the personal allowance
It is the responsibility of your employer to deal with the paperwork so that you don’t overpay tax.
Why has my tax code changed?
HMRC should adjust your tax code in line with your circumstances.
But millions of people find themselves on the wrong tax code each year, which could have a big impact on their finances.
That’s why it is important to check that you are on the correct code and let HMRC know as soon as possible if you believe it to be wrong.
You can report a change in your income and circumstances by either:
- Using the check your income tax online service
- Contacting HMRC directly
If you check online, you will need to register for a government gateway ID.
Why is my tax code wrong?
There are a number of reasons why you might be on the wrong tax code, meaning that you are paying the wrong amount of tax.
These include if you:
- Started your first job and HMRC has no record of you
- Changed jobs recently and HMRC may believe that you have two jobs so has put you on an emergency tax code which removes your personal allowance
- Changed from self-employed to employed or part-time to full-time
- Have more than one income stream or pension, for example you have two jobs
- Your employer was using the wrong code
- Receive or have stopped receiving certain benefits, such as benefits from your job or taxable state benefits or you claim marriage Allowance
- Claim expenses that you get tax relief on
- Are recently retired
Will get a tax refund if my code is wrong?
If HMRC believes that you have overpaid tax because you have been on the wrong code, they will refund you the tax automatically – you do not need to make a claim.
Your employer will be contacted by HMRC and you should get any money owed in your next payslip.
Depending on how long you have been overpaying for and how much, you could receive thousands of pounds back.
You can claim back up to four years, meaning that you can go back as far as the 2018/19 tax year.
If you spot that you are on the wrong code, you could speed up the process by using HMRC’s online income tax checker, or calling 0300 200 3300.
What if I have been underpaid tax?
It is usually up to the employee to pay any unpaid tax if there are any errors.
HMRC will usually send you a tax calculation (a P800) for a tax year if you have not paid enough tax.
Always check the P800 calculation carefully using your own records, such as on your P45 or P60, as HMRC can get their numbers wrong.
Contact HMRC as soon as you can if you notice that you are paying the wrong amount of tax. This should stop you from getting a bigger tax bill later on.
In the instance that you owe tax to HMRC but cannot afford to do pay it in one lump sum, there are other options. You could organise a payment schedule – for example, spreading the owed money over a period of a year.
HMRC may write off the tax if the underpayment was not your fault. For example, if your employer did not operate PAYE properly. If you believe this is the case then contact HMRC and ask for a so-called “extra statutory concession” or an A19.
Remember, it is important to make sure that HMRC have the latest personal details for you at all times. If your circumstances have changed, go to gov.uk.
FAQs
What is the tax code 1131N? ›
1131N is a common tax code for people who have taken advantage of the Marriage Allowance for the 2023/24 tax year.
What is tax code 1257L? ›Tax code 1257L
The most common tax code for tax year 2023 to 2024 is 1257L. It's used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car). 1257L is an emergency tax code only if followed by 'W1', 'M1' or 'X'.
Non-cumulative tax codes (W1 or M1)
The tax due on each payment is determined without taking into account any tax you've already paid this year or how much of your personal allowance has been used. In other words, it only looks at an isolated view of that period.
K codes are a type of tax code that will result in more tax being collected out of your wages, via the PAYE system. More information about the PAYE system and K codes can be found at the end of this article.
What is tax code 149? ›26 U.S. Code § 149 - Bonds must be registered to be tax exempt; other requirements. Nothing in section 103(a) or in any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any registration-required bond unless such bond is in registered form.
How do I know to put a 1 or 0 for tax exemption? ›By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period. If you wish to claim 1 for yourself instead, then less tax is taken out of your pay each pay period.
What is tax code 1250L? ›1250L is a cumulative tax code, which means that if you return to work after a break or if you start working part-way through the tax year, your tax-free personal allowance will have been building up and you may pay less tax for a while.
What is the tax code M1? ›M1 is a kind of “emergency tax code”, meaning it's only supposed to be temporary until HMRC has enough information to issue you the right code.
How do you calculate how much tax I will pay? ›Estimating a tax bill starts with estimating taxable income. In a nutshell, to estimate taxable income, we take gross income and subtract tax deductions. What's left is taxable income. Then we apply the appropriate tax bracket (based on income and filing status) to calculate tax liability.
What is code T on w2? ›T – Employer Provided Adoption benefits (not included in Box 1). Complete Form 8839, Qualified Adoption Expenses, to compute any excludable amounts. V – Income from exercise of non-statutory stock option(s ) (included in Boxes 1, 3 (up to Social Security wage base), and 5).
What is the tax code for non taxable transaction? ›
Hence, tax code V0 is used for non taxable transactions.
What does non taxable amount mean? ›Income that is taxable must be reported on your return and is subject to tax. Income that is nontaxable may have to be shown on your tax return but is not taxable.
What is the tax code 766? ›An IRS Code 766 on your tax transcript is good news. Code 766 means that you have a credit on your account, which might be the result of a refund, an overpayment from a previous year, or a credit from the current year's return.
What does tax code 150 mean? ›Code 150 indicates that your tax return has been processed and added to the IRS's main file. You will receive a refund in the event your tax liability turns out to be less than you anticipated.
Where can I find the tax code? ›Internal Revenue Code
The Constitution gives Congress the power to tax. Congress typically enacts Federal tax law in the Internal Revenue Code of 1986 (IRC). The sections of the IRC can be found in Title 26 of the United States Code (26 USC).
NAICS 236100 - Residential Building Construction.
What is tax code 484120? ›Business code 484120 (General Freight Trucking, Long Distance) will default to using the 80% limit for DOT, instead of the standard 50% limit.
What is tax code 236110? ›For example, one of the subcategories under the general category of construction-related codes starting with 23 is Residential Building Construction, which is coded as 236110. If your business generates most of its labor and revenue from constructing apartment buildings, then this code would apply to its tax filings.
Should I claim 1 or 2 allowances? ›If you are single and have one job, or married and filing jointly then claiming one allowance makes the most sense. An individual can claim two allowances if they are single and have more than one job, or are married and are filing taxes separately.
What does claiming 0 1 or 2 mean? ›If you have more than one job and are single, you can either split your allowances (claim 1 at Job A and 1 at Job B), or you can claim them all at one job (claim 2 at Job A and 0 at Job B). If you're single and have one job, claiming two allowances is also an option.
What does claiming 0 mean? ›
return you will most likely receive a refund. • If you are claimed as a dependent on someone else's tax return, you should claim zero. allowances. • Claiming zero allowances means less take home pay, but a bigger tax refund during tax. season.
What is tax code 1185L? ›' section below. The 1185L code is usually applied on a cumulative basis. This means that your tax position is recalculated each pay day using total pay to date and free-pay to date during the tax year. As a result, variations in income between months are averaged out.
What is the tax code 1250L M1? ›So, what if your tax code is 1250L-W1 or 1250L-M1? Having W1 or M1 attached to your code means it is a non-cumulative tax code. The tax due on each payment is therefore determined without taking into account any tax you've already paid this year, or how much of your tax-free personal allowance has been used.
What is difference between tax type and tax code? ›A tax calculation code indicates the tax calculation for order items. A store typically collects two type of taxes: sales or use tax, and shipping tax. The tax codes are unique within each tax type for a store. Only one tax calculation code of each tax type is applied to a particular order item.
What is tax code 1060L M1? ›What does it mean? Nearly everyone is entitled to a tax-free personal allowance, which means that a certain amount of your earnings each year are paid to you without being taxed. If your tax code includes 1060L, it means your allowance is £10,600.
What is the tax code 109? ›IRC § 109 excludes from gross income any gain derived by a lessor upon termination of a lease from acquisition of improvements that had been made by the lessee. The statutory exclusion applies only to "income, other than rent," derived "upon termination of the lease." Pursuant to Reg.
What does M1 mean on 1099r? ›The code M1 indicates that your loan was paid off with an offset distribution from the retirement plan, effectively a distribution from the plan paid to you that was immediately turned around to pay off the loan.
How much federal tax do I pay on $36000? ›If you make $36,000 a year living in the region of California, USA, you will be taxed $6,496. That means that your net pay will be $29,504 per year, or $2,459 per month. Your average tax rate is 18.0% and your marginal tax rate is 25.3%.
How much taxes should I pay on $20000? ›That means that your net pay will be $17,313 per year, or $1,443 per month. Your average tax rate is 13.4% and your marginal tax rate is 21.7%.
How much tax comes out of a $500 paycheck? ›If the gross pay is $500, Social Security and Medicare combined come to $38.25. The employee's federal income tax is $47.50. After these amounts are subtracted, the take-home pay comes to $414.25. If you are in a state that levies a state income tax, follow state rules to calculate and deduct the state income tax.
What is tax code 846? ›
Transaction code 846 signals a refund, plus any interest, has been approved by the IRS.
What is Code Box 14 W-2? ›Box 14 is used to report amounts that don't belong in other boxes on Form W-2. Employers can use it to report additional tax or income information for filing or informational purposes. Some employers use box 14 to report amounts deducted for State Disability Insurance taxes or union dues that may be tax deductible.
What is code T in box 7? ›| Distribution Codes | Explanations |
|---|---|
| T. Roth IRA distribution, exception applies | Unknown if participant has owned the Roth for at least 5 years, but he/she is either: • At least 59 ½ • Deceased • Disabled |
Congress enacts these tax laws, and the IRS enforces them. Sources of taxable income are identified in the Code under Section 61, Gross Income Defined.
What is the IRS code for tax exempt? ›To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.
What is tax code 6011? ›6011. "Sales price." (a) "Sales price" means the total amount for which tangible personal property is sold or leased or rented, as the case may be, valued in money, whether paid in money or otherwise, without any deduction on account of any of the following: (1) The cost of the property sold.
How do you know if income is non taxable? ›Nontaxable income won't be taxed, whether or not you enter it on your tax return. The following items are deemed nontaxable by the IRS: Inheritances, gifts and bequests. Cash rebates on items you purchase from a retailer, manufacturer or dealer.
What is not counted as income? ›Earned income also includes net earnings from self-employment. Earned income does not include amounts such as pensions and annuities, welfare benefits, unemployment compensation, worker's compensation benefits, or social security benefits.
How much money can you make tax free? ›For example, in the 2020 tax year, if someone under 65 filing as a single taxpayer made at least $12,400, they had to file taxes. In 2021, for that same age and filing status, the income threshold was $12,550.
What is the week 1 month 1 basis? ›The Week 1 basis is also known as 'non-cumulative basis' or Month 1 basis for monthly employees. You tax each pay day on its own, separate from previous weeks. Pay and tax credits are not accumulated from the previous 1 January.
What is the net investment income tax code? ›
What is the Net Investment Income Tax (NIIT)? The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.
Why wasn't any federal income tax withheld? ›You might have claimed to be exempt from withholding on your Form W-4. You must meet certain requirements to be exempt from withholding and have no federal income tax withheld from your paychecks. You should check with your HR department to make sure you have the correct amount withheld.
What is 1 week basis? ›You may receive a Tax Credit Certificate (TCC) on the Week 1 basis (also known as the 'non-cumulative basis'). This means that your employer will deduct Income Tax and Universal Social Charge (USC) from your pay on a week-to-week basis.
How many weeks in a month when calculating salary? ›Online calculator to find the number of weeks in a month. There are about 4.3 weeks per month.
What is starter checklist? ›As an employer, a starter checklist gives you the details you need to set up a new employee on the payroll system and assign the correct tax code for tax and National Insurance deductions. It used to be known as a P46 form.
How much investment income is tax free? ›The statutory threshold amounts are: Married filing jointly — $250,000, Married filing separately — $125,000, Single or head of household — $200,000, or.
How do you avoid net investment income tax? ›It's net investment income and not gross investment income. If we can increase investment expenses to lower our net income, that is another way to avoid the Net Investment Income Tax. Examples of expenses are rental property expenses, investment trade fees, and state and local taxes.
Why is receiving a large tax refund a bad thing? ›What's so wrong with receiving a big tax refund? There's nothing erroneous or wrong about getting a large refund, but it probably means that you overpaid taxes during the year if you do. The IRS is just returning that overpayment to you without interest.
What is the average tax return for a single person making $60000? ›If you make $60,000 a year living in the region of California, USA, you will be taxed $13,653. That means that your net pay will be $46,347 per year, or $3,862 per month.
What is the federal tax rate for someone making $60000 a year? ›A single filer earning $60,000 in 2022 will pay: 10% federal income tax on the first $10,275 of income (which comes to $1,027.50 in taxes) 12% on dollars $10,276 up to $41,775 ($3,779.88 in taxes) 22% on $41,776 up to $60,000 ($4,009.28 in taxes)
How do I know if enough federal taxes are being withheld? ›
Use the Tax Withholding Estimator on IRS.gov. The Tax Withholding Estimator works for most employees by helping them determine whether they need to give their employer a new Form W-4. They can use their results from the estimator to help fill out the form and adjust their income tax withholding.
Can I still get a refund if no federal taxes were withheld? ›It's possible. If you do not have any federal tax withheld from your paycheck, your tax credits and deductions could still be greater than any taxes you owe. This would result in you being eligible for a refund.
How many allowances should I claim? ›If you are single and have one job, or married and filing jointly then claiming one allowance makes the most sense. An individual can claim two allowances if they are single and have more than one job, or are married and are filing taxes separately.