What is a tax code and where can I find mine?
Ever seen a string of four or five numbers and letters on your payslip? Something like 987L or 1257L? Well, this is your tax code. And it's pretty important, as it tells your employer how to apply tax to your earnings.
Your tax code is shown on your PayDashboard payslip. If you need to make a note of your tax code now, just click here to open your payslip archive in a new window. Then you can check your most recent payslip for your current tax code and come back to this article.
How it works
Everyone has an annual tax-free allowance (the amount you can earn each year that will not be taxed) and for most people in 2022-23 this is £12,570. Everything you earn above this is taxed. However there are lots of factors that affect how much tax you should pay. The person who calculates your pay each month needs to know how much you get tax-free, and at what rate they should tax the rest of what you earn. So they use your tax code.
- The number tells them how much you should be paid tax-free. Take the number in your tax code, times it by 10, and this is your tax free allowance. i.e. 1257 in your tax code becomes £12,570.
- The letter gives them more detail about how to tax what you earn over this amount.
Your employer doesn't know the detail of why this is your tax code. Only you and HMRC (the tax guys) know this. Your employer just knows what your tax code is so they can deduct tax from your salary correctly.
Think you are on the wrong tax code?
As we said above, your employer doesn't know any of the detail of why you have been given a certain tax code. Only HMRC know this. So unfortunately your employer won't be able to help you very much with this one.
If you think you are on the wrong tax code you need to get in touch with HMRC. You can fill out an online form, call or write.
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