My employee is asking why they are paying so much tax?

A person’s tax code will usually change in the event of their personal allowance going up or down as decided by HMRC, for example, increase/reduction to taxable benefits, changing or obtaining a second job, or additional income such as receiving state or private pension.

To avoid new employees being placed on an emergency tax code, a P45 must be forwarded to the payroll provider before the first pay is processed. Otherwise, notification will need to be obtained from HMRC regarding year-to-date earnings, tax paid and correct tax code.

You can direct employees to HMRC via the employee helpline or through their personal Government Gateway, should they wish to get further details on their current tax code.

Useful Links:

View all FAQs

Publish date