A change to your tax code can affect how much tax is taken from your pay or pension. That means it can increase or reduce your take‑home pay, and in some cases lead to a refund or repayment of tax.

Most people have tax taken automatically from their wages through the Pay As You Earn (PAYE) system. If you’re not sure how PAYE works, you can read our guide on How the Pay As You Earn system works. 

A tax code is a short combination of numbers and letters used by HMRC to tell your employer or pension provider how much Income Tax to take from your pay. It reflects things like your Personal Allowance, any taxable benefits you receive, and whether HMRC needs to collect tax you underpaid in a previous year.

If your tax code changes, the amount of tax taken from your pay can change too. So if you suddenly notice your take-home pay has gone up or down and your salary hasn’t changed, your tax code could be the reason.

You can find your tax code in several places:

• on your payslip – find out how to understand your payslip

• on your P60 or P45

• in letters or emails from HMRC (such as a tax code notice) 

• in your Personal Tax Account or the HMRC app.

When looking checking these documents and pages, make sure all these details are listed correctly:

• employer name and job title

• estimated pay for the tax year 

• any benefits in kind (such as a company car)

• second jobs or pensions

• expenses or tax relief claims.

1. HMRC has updated your estimated income (for example after a pay rise, bonus, overtime or commission).

2. You start or leave a job and your P45 details are processed.

3. You have more than one job or pension and your Personal Allowance is split.

4. You receive taxable benefits from work, such as a company car or private medical cover.

5. You claim work-related expenses or tax relief.

6. HMRC is collecting tax you underpaid from a previous year (known as ‘coding out’).

7. You’ve been put on an emergency or temporary tax code while HMRC waits for information.

Most tax codes end with a letter. For example, L is the standard code for most people who are entitled to the full Personal Allowance.

Other letters can signal special circumstances – such as multiple incomes, adjustments for benefits, or collection of unpaid tax.

If your tax code has changed, look for a ‘tax code notice’ from HMRC explaining why.

There are a few clues that could indicate that your tax code is wrong, for example:

• your take-home pay drops sharply with no change in salary

• you’re taxed as if you have two jobs when you only have one

•  an old employer still appears on your HMRC record 

•  your HMRC record shows benefits that you don’t receive

•  you’re on an emergency code for longer than expected.

HMRC will ask for some evidence when you get in touch with them about your tax code, these could include:

• recent payslips (including year-to-date figures)

• your P45 or P60

• employer payroll number 

• details of benefits or expenses claimed

• details of any second jobs or pensions

• the date you noticed the issue and any HMRC notice reference number.

If the details HMRC holds about you are wrong, you can ask them to update your tax code. You can find step‑by‑step guidance here: How do I change my tax code 

A change to your tax code can feel worrying, especially if your take‑home pay suddenly goes up or down. Often, it’s HMRC updating your details after something has changed, such as your income, job or benefits.

The most important steps are to check your current tax code, make sure the information HMRC has about you is accurate, and contact them if anything looks wrong. If you act quickly you can help stop underpayments building up or make sure you get any refund you’re owed as soon as possible. 

If you think your tax code is wrong, read our guide on how to change your tax code for step‑by‑step help.

You can also check GOV.UK’s page on why your tax code has changedOpens in a new window for further guidance.