Quick answer: Look at the end of the tax code on your payslip. If it is BR, every pound from that job is being taxed at 20% with no tax-free allowance at all, because HMRC thinks your Personal Allowance is already being used somewhere else. If it ends in W1, M1, X or NONCUM (so BRX is both at once), you are on an emergency code and each payslip is taxed in isolation, as though that month's pay were your whole year. Neither is permanent, and neither means you have lost the money: on a £2,800 month in the 2026/27 tax year, BR takes £560 and 1257L M1 takes £350.50, where the right cumulative code might take nothing at all. Put your salary and code into the MySums take-home pay calculator to see what your payslip should look like once the code is fixed.
Read the code on your payslip before anything else
Your tax code is the single line that explains the deduction. Three parts of it matter.
The numbers are your tax-free pay for the year with the last digit removed. 1257L means £12,570 of tax-free pay, the standard Personal Allowance for 2026/27.
No numbers at all means no allowance against that income. That is BR, D0, D1 and 0T.
A suffix of W1, M1 or X makes the code non-cumulative. GOV.UK sets out exactly which suffixes count: W1 for weekly pay, M1 for monthly pay, X when your pay dates vary, and some payroll software prints NONCUM instead. If your code does not end in one of those, you are not on an emergency code, whatever else is wrong with it.
Here is what the codes behind a surprise deduction usually mean.
| Code on your payslip | What your employer is doing | Typical reason |
|---|---|---|
| 1257L | £12,570 tax-free for the year, spread across your payslips and squared up each time | The normal code for one job |
| 1257L M1 or 1257L W1 | One month's or one week's worth of allowance, with no reference to earlier pay | New job and HMRC has no record of your earlier pay this year |
| BR | 20% on everything from that job, no allowance | HMRC believes your allowance is in use elsewhere |
| BRX | Both of the above: 20% on everything, each payslip treated separately | A job change HMRC has read as a second job |
| 0T | No allowance, and the 20%, 40% and 45% rates applied as pay rises | No P45 and no completed starter checklist |
| D0 | 40% on everything from that job | HMRC expects your other income to fill the basic rate band |
| K followed by numbers | Untaxed income or an old underpayment larger than your allowance, so an amount is added to your taxable pay | A company benefit, or tax owed from an earlier year |
The payslip lines around the tax figure matter too, and the MySums payslip guide goes through them one by one.
Why starting a job triggers it
Your new employer cannot invent your tax history. They need either your P45 or a completed starter checklist, and what they do on your first payday follows directly from which one they get.
Hand over the P45 from your last job and payroll has your pay and tax so far this year. They can run a cumulative code and your tax works out correctly from the first payslip.
With no P45, you fill in a starter checklist instead, and the statement you tick decides the code. The form itself tells payroll which code goes with which box: A gets the full allowance, B gets the same allowance but on a week 1 or month 1 footing, and C gets BR. The Low Incomes Tax Reform Group singles out the wrong statement as a leading source of employee tax trouble, and confirms that box C lands you on BR in 2026/27.
Tick nothing, or hand in no checklist at all, and your employer falls back to 0T. For a basic rate taxpayer that takes the same 20% as BR, so the two look identical on a modest payslip. They stop looking identical higher up: on a £5,000 month, BR takes £1,000 while 0T takes £1,371.67, because 0T starts applying the 40% rate once the month's pay passes a twelfth of the basic rate band.
And sometimes nobody has made a mistake at all. A poster on the MoneySavingExpert forum left one job in December, started another in January, and found their new job coded BRX with a message saying they had been taxed 20% on all earnings because they had two jobs. They had never had two. One experienced forumite replied that they had seen the same thing happen to them twice, and that HMRC reading a job change as a second job is a familiar fault. If your old employer's leaving details never arrived, your allowance is still sitting on a job you have left.
What three codes take from the same £2,800 month
Say you start a new job in July, the fourth month of the tax year, paid £2,800 a month. You had no taxable pay between 6 April and starting. Same person, same pay, same month, three codes.
| Tax code on that payslip | How the tax is worked out | Income Tax deducted |
|---|---|---|
| 1257L, cumulative | Four months of allowance has built up, £4,190, which is more than the £2,800 paid | £0 |
| 1257L M1 | One month of allowance only, £1,047.50, leaving £1,752.50 at 20% | £350.50 |
| BR | No allowance, £2,800 at 20% | £560 |
The cumulative code produces nothing because the allowance you did not use in April, May and June is still waiting for you. That is the whole point of a cumulative code, and it is exactly the part an emergency code ignores.
What it costs if nobody fixes it
Carry those codes to the end of the tax year. Nine payslips at £2,800 is £25,200 of pay, and the correct Income Tax on that in England, Wales or Northern Ireland is £2,526.
- Left on BR for all nine months: £5,040 deducted, so £2,514 overpaid.
- Left on 1257L M1 for all nine months: £3,154.50 deducted, so £628.50 overpaid.
The £628.50 is not random. A month 1 code hands you a twelfth of your allowance for each payslip it runs on, so across nine payslips you only ever get nine twelfths of £12,570. The £3,142.50 you never received, taxed at 20%, is the gap.
To test this against your own figures, put your annual salary into the take-home pay calculator and compare its monthly Income Tax line with what your payslip actually shows. If your payslip is higher, the difference is roughly what you are owed so far.
How to get the code corrected
- Chase the P45. If your last employer has not given you one, ask. GOV.UK names this as the fastest way to give HMRC the details it is missing.
- Check what HMRC thinks you do for a living. Log in to the Check your Income Tax service, which lists every job and pension HMRC has against your name, and this is where a finished job still showing as live becomes obvious.
- Remove the job you have left, and correct your estimated income. HMRC will then update the code and tell you and your employer within 15 working days. On monthly pay the new code should appear on your next payslip or the one after; on weekly pay, by your third.
- Wait 35 days before phoning, if you have just started. HMRC asks for that window to receive your details from both employers, and allows 35 days from your start date for the new code to reach you and your employer. Past 35 days and still on the wrong code, contacting them is reasonable.
- Check the next payslip. If the new code has not reached payroll, tell your employer, because they must use the code HMRC issues and cannot change it themselves.
When the refund actually arrives
In most cases it comes through your wages, not as a separate payment.
Once HMRC has your full income details for the year and issues a cumulative code, your employer works out the difference between the tax you have paid and the tax you should have paid, and refunds it in your pay. That shows up as a smaller deduction, or a visible refund line, on the payslip that first uses the new code.
Two situations delay it. If HMRC still does not have your details, no refund can be worked out until it does, which is why the P45 matters so much. And if the tax year ends before the code is corrected, HMRC reconciles your record after 5 April using the figures employers submit, then writes to you about the overpayment rather than routing it through payroll.
One thing a corrected code does not touch: National Insurance. It is worked out on each pay period separately, against its own thresholds, and your tax code plays no part in it. The same goes for student loan deductions.
If you live in Scotland or Wales
Your code carries a letter in front of it: S for Scottish Income Tax, C for Welsh rates. So the Scottish version of BR is SBR, and the Scottish emergency code is S1257L M1.
Scottish basic rate is also 20%, so SBR on a £2,800 month still takes £560. What differs is the correct figure it should be compared against, because Scotland has starter, basic, intermediate, higher, advanced and top rates rather than three. On the £25,200 year above, a Scottish taxpayer owes £2,486.33 instead of £2,526, so the refund works out £39.67 larger.
Welsh rates are currently set at the same levels as England and Northern Ireland, so a C code changes which government receives the money, not the arithmetic. If you have moved between nations, check that HMRC has your current address, because that letter follows where you live. The MySums guide to UK Income Tax bands sets the rates side by side.
If the real answer turns out to be that you genuinely do have two jobs, the BR code is doing its job, and second job tax explained covers how the allowance is shared. If that job is correctly coded and still leaves you owing tax at the end of the year, second job on a BR tax code works through the sums.
This article explains how PAYE tax codes work for employees in the 2026/27 tax year. It is general information, not personal tax advice. If your situation involves several income sources, a K code or an underpayment from an earlier year, HMRC or a qualified tax adviser can confirm what applies to you.