What is the 2021/22 PAYE tax code?
This is a freeview 'At a glance' guide to the 2021/22 PAYE tax code.
Details of the PAYE codes for 2021/22 are as follows.
- The basic PAYE tax code is setat 1257L for employees. This gives an employee a personal allowance of £12,570 for the year. This is a £70 increase on 2020/21 and worth £14 to a basic rate taxpayer.
- £12,570 is also called the 'emergency code'.
- Employees who earn more than £125,140 receive no personal allowance and should be on an 0T tax code (see below).
- Employeeswho earn between £100,000 and £125,140 have their personal allowance tapered away. Itis reduced by £1 for every £2 in excess of£100,000.
- Employees who have claimed the Marriage allowance, by virtue of a low-earning spouse, have a PAYE code with a suffix of M. Those who surrender the allowance have a suffix of N.
Employees who are Scottish Taxpayers have the prefix S.The higher rate threshold in Scotland is £43,663 in 2021/22 (£43,430 in 2020/21), compared to £50,270 (£50,000 in 2020/21) in the rest of the UK.
Employees who are Welsh Taxpayers have the prefix C. The higher rate threshold in Wales is the same at that for the rest of the UK at £50,000.
What tax code do I use for 2021/22?
If the employee is a starter or casual worker completethe Starter Checklist.
Otherwise use 1257Lfor employees unless:
- Notification of a different code is advisedby HMRC.
- The employee's code was not the basic code last year, in which case expect the code to be the same as last year unless otherwise notified by HMRC.
It is advisable to double-check with HMRC and if in doubt check online or phone the tax office.
Do not carry forward any week one or month one adjustments.
What is the 'emergency' tax code for 2020/21?
- 1257L is the default code. Codes may then be suffixed with W1 (weekly pay), M1 (monthly pay) or X.
What is code ending in OT?
This means that the employee has not been given any allowances against tax. This is most likely because the employer has probably not been given the employee's starting information, they are is a casual worker or earn over £125,140.
How do I check my tax code?
It is said that less than 80% of employees bother to check their PAYE code. It is foolish not to check it, as it won't bite you.
- If your code is lower or higher than expected you need to find out why.
- It may have been adjusted by HMRC to code out underpayments of tax in previous tax years, seePAYE collection of tax debts.
- If you receive any benefits from employment or do more than one job, or receiveinvestment income and are a higher rate taxpayer you should find that your PAYE code is restricted in some way.
- COVID-19: home-working? Have you claimed your Working from home allowance?
- If your taxable benefits are not adjusted for on your PAYE code it may be that there is an error or your employer may be payrolling your benefits. Check with your employee first.
- If you fail to check your code you may pay the wrong amount of tax. Do not rely on HMRC to provide you with the correct code.
See How to check your PAYE code.
Pensioners
Pensioners no longer qualify for any additional age allowance.
Married pensioners over 83 (born before 6 April 1935) may receive the married couples allowance adding up to 891 to their tax code.
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FAQs
Details of the PAYE codes for 2021/22 are as follows. The basic PAYE tax code is set at 1257L for employees. This gives an employee a personal allowance of £12,570 for the year. This is a £70 increase on 2020/21 and worth £14 to a basic rate taxpayer.
Where can I find my PAYE coding? ›
You can check your current year tax code via your Personal Tax Account, on gov.uk. For years prior to 23/24, you can check your code via the P2 notifications issued to you by HMRC.
What is PAYE code UK? ›
In the UK, every person paid under the PAYE scheme is allocated a tax code by HM Revenue and Customs. This is usually in the form of a number followed by a letter suffix, though other 'non-standard' codes are also used. This code describes to employers how much tax to deduct from an employee.
How do I read my UK tax code? ›
The numbers in an employee's tax code show how much tax-free income they get in that tax year. You usually multiply the number in the tax code by 10 to get the total amount of income they can earn before being taxed. For example, an employee with the tax code 1257L can earn £12,570 before being taxed.
What are the most common UK tax codes? ›
The most common tax code for tax year 2024 to 2025 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'. Emergency codes can be used if a new employee does not have a P45.
What does the T mean on my tax code? ›
T indicates allowances are split between 2 or more incomes and HMRC will review the code every year. X indicates there may be tax issues and HMRC will review the tax paid at the end of the tax year. BR income is taxed at basic rate, of 20%
What does a UK PAYE number look like? ›
The reference number consists of two parts: a three-digit HMRC office number, and a reference number unique to your business. Usually it looks something like 123/A56789 or 123/AB56789, with some exceptions.
What does underpaid tax included in PAYE coding mean? ›
Posted 5 months ago by Penny T. Hi, On the self-assessment 'Underpaid tax included in PAYE coding' section, it says 'If you pay tax under PAYE, your 6 April 2022 to 5 April 2023 tax code may have been adjusted to collect tax you owe for earlier years.
What is an example of a tax code? ›
The term “tax codes” can refer to a collection of tax laws, such as the Internal Revenue Code (IRC), and can also refer to specific tax laws within the IRC. For example, IRC section 162 is a tax code that defines when you can claim a business deduction.
Where can I read the tax code? ›
Internal Revenue Code
The sections of the IRC can be found in Title 26 of the United States Code (26 USC). An electronic version of the current United States Code is made available to the public by Congress. Browse "Title 26—Internal Revenue Code" to see the table of contents for the IRC.
The W-2 box 12 codes are: A – Uncollected Social Security tax or Railroad Retirement Tax Act (RRTA) tax on tips. Include this tax on Form 1040 Schedule 2, line 13. B – Uncollected Medicare tax on tips.
What is the most popular tax code? ›
The most common tax code for the 2022-23 tax year is 1257L.
What are the 3 main taxes in the UK? ›
Most receipts come from three main sources: income tax, National Insurance contributions (NICs) and value added tax (VAT). Together they raised around £626 billion in 2023/24.
Can I find my PAYE coding notice online? ›
You can see your current coding notice in your personal tax account. Or if you fill in a tax return each year and are registered for self assessment online, you should be able to view your PAYE coding notices online.
Where can I access the Internal Revenue Code? ›
Internal Revenue Code
The sections of the IRC can be found in Title 26 of the United States Code (26 USC). An electronic version of the current United States Code is made available to the public by Congress. Browse "Title 26—Internal Revenue Code" to see the table of contents for the IRC.
What is non-coded income? ›
Non coded income would usually be income that is outside of an employment or pension.
