How do I change a tax code?
Contents
Summary
This article will explain how to alter employee tax codes within the Payroll system.
More Information
If you receive notification of a new tax code to be used for the tax year starting 6th April 2021, you will need to amend the employees individual record when you have moved into the new tax year.
If you are registered for PAYE Online you may access your online coding notices.
If you do not receive individual notifications your employees will remain on their current tax code but you must not copy or carry over any 'Week 1' or 'Month 1' indicators.
Individual Tax Code Changes
 | This option should be used to make individual tax code changes at the start of the tax year or when notified of a change during the tax year. |
 | Tax Code Changes should be made in the period they are to be effective from and not before. |
- Go to " Payroll Run Payroll Period".
- Select the correct pay period from the selection.
 | 'Monthly' or 'Weekly'. |
- Move to the employee in question.
- Press <Shift+F10>.
- Select the [Tax, NI and Pension] tab.
- Amend the "Tax Code" and confirm the change.
- Press <Esc> and [Accept] to complete the change.
Multiple Tax Code Changes
| This option is usually only used at the start of a tax year. |
| The following instructions should be done BEFORE entering any individual tax code changes. For any employee for whom you have received a P6, their tax code MUST be checked and changed to match the form. |
- Go to " Payroll Maintenance Options Payroll Settings Global Tax Code Changes".
- Select the suffix you wish to change e.g.
'L'. - Enter the amount you wish to raise it by in the "Allow." column.
- Press <F2> to view the proposed changes.
- All employees will be tagged as standard. This can be left as is or you can untag certain employees by pressing <U> e.g.
The ones with an individual tax code notice. - Press <F2> to finalise the changes.
- Press [Tagged] to confirm the change or press [Cancel] to abort the changes.
Emergency Tax Code
An emergency tax code is only classed as such if followed by 'W1', 'M1' or 'X'. Emergency codes can be used if a new employee doesn't have a P45 but you should always follow HMRC guidance when you employ a new employee.
The emergency tax code for the 2023/2024 tax year is 1257L W1 (Weekly Pay), 1257L M1 (Monthly or 1257L X (Variable pay dates)
For further more detailed information please refer to the HMRC website.
At the start of a new tax year, unless notified otherwise, ensure that "Week/Month 1" is set to 'No' for each employee.
See also
- Payroll end of year
- How to amend your payroll tax bands
- How do I run a payroll period?
- Entering P45 details/new starters
