PAYE codes

TAX CODES

The amount of income tax that is deducted from an employee’s pay or non-state pension depends on their tax code and how much of their taxable income income is above their personal allowance. Below are a list of current tax codes in use.

Emergency Tax Code

Where a week 1/month 1 tax code is operated this means that your tax is based only on what you are paid in the current pay period and takes no account of any pay received, or tax paid, previously. Instead, you will receive 1 week or 1 months tax allowance and may under or overpay tax. This code is usually operated when you change jobs in a tax year, you start work for an employer after being self-employed, start getting a company benefit or start receiving the state pension.

The emergency tax codes for 2024/25 will be 1257L WK1 or 1257L M1 or 1257L X.

PAYE TAX CODES

What the letters mean

L

You are entitled to the basic tax-free personal allowance. In 2024/25 the basic personal allowance is £12,570 so the tax code used will be 1257L

M

You received 10% of your partner’s personal allowance

N

You transferred 10% of your personal allowance to your partner

S

You are taxed on your pension or income using Scottish tax rates

T

Issued for a number of reasons and is reviewed by HMRC each year e.g. your personal allowance may be reduced because your annual income is more than £100,000

Y

You were born before 6.4.1938 and entitled to the higher age related allowance - phased out

OT

You used your allowances against other income OR you started a new job and your employer has no details they need to give you a tax code. Also used for post employment salary/holiday pay after a P45 has already been issued

BR

All income is taxed at basic rate because you have more than one job or pension and your personal allowance is fully used up by the other job or pension

D0

All income is taxed at the higher rate because you have more than one job or pension and your personal allowance has been used up by that job or pension

D1

All income is taxed at the additional rate because you have more than one job or pension

NT

You are not paying any tax on this income. This code does not have a number. Usually used in very limited cases e.g. musicians who are regarded as self-employed and not subject to PAYE

K

You have income/benefits that are more than the tax-free allowance - limited to 50% of pre-tax salary

WK1/M1

Emergency tax codes where tax is based on current pay only - it is non-cumulative. That is, tax is paid on the taxable pay less tax free allowance for that period only. It results in slightly more tax payable.

Notes: Where the tax codes are for Scottish taxpayers, similar PAYE codes prefixed with S are used as above. For Welsh taxpayers, the prefix is C