What does the number in my Tax Code mean?
Your employee’s tax code is put into the payroll software to work out how much tax to deduct from your pay throughout the year.
As a new employee, we normally work out your tax code by using your P45. The code will usually be made up of several numbers and a letter, such as 1250L.
As your employer, we usually need to update your tax code at the start of a new tax year. If the tax code changes during the year, HM Revenue and Customs (HMRC) will email us and we will update our payroll records as soon as possible.
The most common tax code for tax year 2019 to 2020 is 1250L. It’s used for most people with one job and no untaxed income, unpaid tax or taxable benefits.
If this is your first job in the UK, you will not need a P45 and will be put automatically on the standard tax code.
Your tax code is used by us, your employer, or pension provider to work out how much Income Tax to take from your pay or pension.
HM Revenue and Customs (HMRC) will tell them which code to use to collect the right tax. You can check your Income Tax online to see:
what your tax code is
if your tax code has changed
how your tax code is worked out
how much tax you’re likely to pay