As the new tax year begins, you may soon receive your first payslip for the 2023/24 year.
When you receive your payslip, you may want to quickly check if your pay is correct, which requires understanding some special numbers and codes.
How to understand your payslip and check if it’s correct? Our team has summarized the following points for you.
How to Find Your Tax Code
Your tax code can usually be easily found on your latest payslip.
If you haven’t been working recently, you can also find your tax code on a P45.
Of course, the easiest way is to directly ask the relevant department of your company, as they are often willing to help you solve the problem.
Once you have identified your tax code, you can check or correct it.
Common Tax Codes
If you receive payslips regularly, you may notice codes consisting of numbers and letters, in addition to your name and month.
If you see 1257L, this is one of the tax codes.
This most common tax code refers to a personal tax-free amount based on £12,570, and any amount above this requires taxation.
If you have multiple sources of income or have changed employers, your tax code may be incorrect.
Common Letters Used in Tax Codes
Using 1257L as an example, L is a common letter used in tax codes, which represents employees who are entitled to a standard personal tax-free allowance.
The letter will change with your special status, so not everyone can see the standard tax code ending with L.
- Ending with S: mainly for employees living in Scotland.
- Ending with BR/SBR: used for a second job or pension, where HMRC has allocated the tax-free amount to another income.
- Ending with M: for employees who transfer part of their personal allowance to their spouse or civil partner.
- Ending with T: when HMRC needs to review certain items with employees.
You can also view the complete list on GOV.UK.
How to Correct an Incorrect Tax Code
If you need to correct your current tax code, you can contact HMRC or your agent.
Usually, once you have obtained the correct tax code, you will receive an additional tax payment in your next payslip.
If you find that you have paid too much tax using the incorrect tax code for a period of time, you can also apply for a refund of the overpaid tax for up to the past four years.
If you are using our service or have other payslip issues, please contact our accounting team, and we will respond promptly.
