UK PAYE Calculator (HMRC Tax Codes & Deductions)
Pay As You Earn (PAYE) is the statutory system HM Revenue & Customs (HMRC) uses to collect Income Tax and Class 1 National Insurance from employees as they earn it. Deductions are determined by your pay period frequency, contractual gross wages, and your specific HMRC tax code. This calculator computes exact PAYE deductions per pay period (weekly, fortnightly, 4-weekly, or monthly), accounts for emergency W1/M1 non-cumulative status, models K-codes (for company car and P11D taxable benefits), enforces the statutory 50% regulatory cap, and calculates employer Class 1 secondary NIC contributions.
HMRC PAYE Tax & Payslip Deductions Calculator (2025 / 2026)
Pay As You Earn (PAYE) is HM Revenue & Customs' system to collect Income Tax and National Insurance directly from employment pay. This tool accurately parses standard codes (1257L), emergency tax codes (W1/M1), K-codes (taxable benefits in kind), and flat codes (BR, D0, 0T).
How this calculator works
How it works
- 01Pay Period & Gross Pay: Select pay frequency (weekly, fortnightly, 4-weekly, or monthly) and enter contractual gross earnings for that single period.
- 02Tax Code Interpretation: Parses your HMRC tax code (1257L for £12,570 allowance, BR for flat 20%, D0 for flat 40%, 0T for zero allowance, or K-codes for negative allowances).
- 03Cumulative vs W1/M1 Status: Select whether your tax is calculated cumulatively across the tax year or on a non-cumulative Week 1 / Month 1 emergency basis.
- 0450% Regulatory Cap: Checks Section 7(3) of the PAYE Regulations 2003, ensuring total tax deducted does not exceed 50% of your gross pay in a single period.
- 05Employee National Insurance: Deducts 8% on earnings between the Primary Threshold (£242/wk, £1,048/mo) and Upper Earnings Limit (£967/wk, £4,189/mo), plus 2% above.
- 06Employer Secondary NICs: Calculates the 15% employer National Insurance contribution on earnings above the Secondary Threshold (£96/wk, £417/mo), displaying total remittance to HMRC.
Tax rules that apply
- •Cumulative PAYE System: Under standard PAYE rules, your tax allowance and tax bands accumulate each pay period (e.g. Month 6 gets 6/12ths of the annual allowance). If you had lower earnings earlier in the year, you may pay less tax or receive an automatic tax refund through your paycheck.
- •Week 1 / Month 1 (W1/M1) Emergency Codes: When an employee starts a new job without a P45, HMRC often assigns a W1 or M1 emergency tax code. On this non-cumulative basis, each pay period is treated in isolation using exactly 1/52nd or 1/12th of allowances, ignoring previous earnings.
- •K-Tax Codes for Company Benefits: If your taxable benefits in kind (such as a company car or private medical insurance via P11D) exceed your tax-free personal allowance, HMRC issues a 'K' code. The number represents negative allowance added to your taxable income (e.g. K250 adds £2,500 of taxable pay per year).
- •The 50% Overriding Regulatory Limit: To protect employees from receiving zero pay due to large tax code adjustments or underpaid prior-year taxes, HMRC regulation mandates that total PAYE tax deducted cannot exceed 50% of gross pay in any pay period.
Current Tax Rates
| Tax / Deduction | Rate | Notes |
|---|---|---|
| Monthly Personal Allowance (1257L) | £1,047.50 / mo | Standard tax-free allowance per month |
| Weekly Personal Allowance (1257L) | £241.73 / wk | Standard tax-free allowance per week |
| Employee Primary NI Threshold | £1,048 / mo | £242/week; zero NI paid below this floor |
| Employee Upper Earnings Limit | £4,189 / mo | £967/week; 2% rate applies above this ceiling |
| Employer Secondary NIC Rate | 15.00% | Paid by employer on earnings above £417/month |
| HMRC Regulatory Deduction Cap | 50.00% | Maximum legal PAYE tax deduction per check |
What this calculator assumes
- Calculated in accordance with HMRC 2026/27 Employer Further Guidance (CWG2) and PAYE Regulations 2003.
- Assumes employee is under UK State Pension age and not on an apprenticeship NI exemption.
- Excludes Scottish arrestment of wages orders or court attachment orders.
- Assumes employer does not qualify for Employment Allowance offset against secondary NICs.
Where our numbers come from
These calculators are based on official government tax rates and rules. We link directly to the source so you can verify everything yourself.
HMRC — Income Tax & National Insurance Rates 2026/27
HM Revenue & Customs (HMRC)
GOV.UK / HMRC — Understanding PAYE Tax Codes (1257L, BR, K-codes)
HM Revenue & Customs (HMRC), United Kingdom
HMRC — Employer Tax Rates & Thresholds 2025–2026
HM Revenue & Customs, United Kingdom
Frequently Asked Questions
How does the HMRC PAYE system calculate tax each month?
On a standard cumulative PAYE code (like 1257L), your employer's payroll software calculates your tax by: (1) Adding your gross pay to date in the tax year; (2) Multiplying your annual allowance (£12,570) by the fraction of the tax year completed (e.g. 5/12 in Month 5); (3) Calculating total tax due on year-to-date taxable pay; and (4) Subtracting tax already paid in previous months. The difference is the tax deducted from your current payslip.
What is an emergency tax code and why am I on W1 or M1?
HMRC issues an emergency tax code (usually 1257L W1, 1257L M1, or 1257L X) when you change jobs and your new employer does not have your P45 or prior pay history. 'W1' stands for Week 1, and 'M1' stands for Month 1. On this code, your tax is non-cumulative: your employer gives you 1/52nd or 1/12th of your personal allowance each pay period, but cannot take into account tax you overpaid or underpaid earlier in the tax year.
What does a K-tax code mean on my UK payslip?
A K-code (such as K450 or K1000) is used when your taxable state benefits, company perks (like a company car or private healthcare), or unpaid back taxes exceed your annual Personal Allowance. Instead of giving you a tax-free allowance, a K-code adds an extra untaxed amount to your taxable pay each period. For example, K450 means £4,500 of untaxed income is added to your taxable earnings across the year.
What is the 50% regulatory deduction limit in PAYE?
Under Regulation 7(3) of the Income Tax (Pay As You Earn) Regulations 2003, an employer is legally prohibited from deducting more than 50% of an employee's total gross pay in Income Tax in any single pay period. This 'overriding regulatory limit' ensures that employees with heavy K-codes or substantial back-tax adjustments still receive take-home earnings on payday.
What is the difference between tax code BR, 0T, and D0?
All three give you zero personal allowance, but they apply different tax rates: (1) Code BR (Basic Rate) taxes 100% of your earnings at a flat 20%, common on second jobs or pensions; (2) Code D0 (Higher Rate) taxes 100% of your earnings at a flat 40%; and (3) Code 0T (Zero Threshold) provides zero personal allowance but uses standard progressive tax bands (20% up to £37,700, 40% up to £125,140, 45% above).
How can I fix an incorrect tax code with HMRC?
If your tax code is incorrect, you do not have to wait for your employer. You can update your tax code instantly online using your HMRC Personal Tax Account on GOV.UK or through the official HMRC Mobile App. You can check your estimated income, report changes in company benefits, or tell HMRC if you only have one job. Once updated, HMRC will issue an electronic P9 or P6 notice to your employer's payroll system.
