½Û×ÓÊÓƵ

Each employee is allotted a PAYE code by HMRC and the employer is notified of the code (SI 2003/2682, regs 13, 14). Employers can access the codes via PAYE online for employers (1.2).

In determining the employee's tax code, HMRC considers reliefs available to the employee (SI 2003/2682, reg 14(1)(c)). The total of the reliefs is reduced for other items such as any other PAYE income of the employee (eg income from a part-time job, a state pension and benefits-in-kind) (SI 2003/2682, reg 14(1)(b), (d)–(g)). The code can also be affected by tax adjustments from prior years, and taxpayer requests for tax due on non-PAYE income (such as rental income) to be collected via the PAYE system.

Most codes comprise numbers and a letter.

The numbers in the code represent the amount of the total allowances and reliefs available to the individual less amounts that restrict those allowances and reliefs.

The letter in the codes has meaning. Common letter codes are described in the table below and more can be found at GOV.UK.