Tax code decoder
£4,759 is added to your taxable pay instead of taken off
What each part means
- A K code means your deductions are bigger than your allowances. Instead of getting tax-free pay, about £4,759 a year (£396.58 a month) is added to your income before tax is worked out.
- This usually happens when HMRC is collecting tax on something paid without tax taken off: a State Pension bigger than your Personal Allowance, a company car, or tax you owe from an earlier year.
- Your employer or pension provider can never take more than 50% of your pay in tax under a K code, whatever the code says.
What is added to your pay before tax
Per year
£4,759
Per month
£396.58
Per week
£91.52
Your employer or pension provider adds this to your income and taxes the total. Nothing is tax-free.
Does it look right?
A K code is unusual but often correct, especially for pensioners.
- The most common cause is a State Pension larger than your Personal Allowance, or a State Pension plus a company car or medical insurance.
- Your employer or pension provider can never take more than half of your pay in tax, however big the K number.
- Check your P2 coding notice line by line with the breakdown tool, and make sure the State Pension figure matches your DWP letter times 52.
If you think it is wrong
- 1
Sign in to your Personal Tax Account. Under PAYE you can see what HMRC thinks you earn from each source and what is in your code, and you can correct most of it yourself.
Personal Tax Account (GOV.UK) - 2
If you would rather talk to someone, ring the Income Tax helpline on 0300 200 3300 with your National Insurance number to hand. Ask them to explain each line of your code and to send you a P2 if you have not had one.
Income Tax enquiries (GOV.UK) - 3
Once HMRC changes your code they send the new one to your employer or pension provider. Any tax you overpaid earlier in the year comes back automatically in your next pay on a cumulative code.