Starting a New Job: Tax and National Insurance in Week One
Your first payslip in a new job can be a surprise — sometimes more tax is deducted than you expected, sometimes less. The reason is usually that your employer does not yet have your complete tax history and has to use an emergency or starter tax code. Here is what to expect and how to resolve it quickly.
What is a P45 and why does it matter?
When you leave a job, your employer issues a P45 — a form showing your total pay and tax for the current tax year up to your leaving date. Giving this to your new employer allows them to apply the correct tax code from your first payslip. Without a P45, they must estimate your tax situation, which often results in the wrong amount being deducted.
No P45: what happens
If you cannot provide a P45 — because you have been unemployed, this is your first job, or you simply have not received it yet — your new employer will ask you to complete a Starter Checklist (previously known as a P46). You tick one of three boxes:
- Statement A: This is your first job since 6 April and you have not received any taxable benefits — code 1257L applied cumulatively
- Statement B: This is your only job but you have had another job since 6 April or received taxable benefits — code 1257L applied on a W1/M1 (non-cumulative) basis
- Statement C: You have another job or pension — code BR (Basic Rate, no personal allowance) applied
Emergency tax codes: what they look like
An emergency tax code looks like:
- 1257L W1 (weekly pay) or 1257L M1 (monthly pay): you receive a personal allowance but it is calculated non-cumulatively — each period is treated in isolation
- BR: all income taxed at Basic Rate (20%) with no personal allowance — this over-deducts tax for most people
- 0T: zero personal allowance, all income taxed — most aggressive emergency code
Will you overpay tax?
Possibly, depending on the code applied. If BR or 0T is used and you are only working one job, you are almost certainly paying too much tax. HMRC usually corrects this within 2-4 weeks once your new employer's Real Time Information (RTI) submission reaches HMRC and they update your code. The overpaid tax is returned either as a lower deduction in a subsequent month or, after the tax year ends, via a P800 refund.
Student loan repayments and new jobs
If you have a student loan, tick the relevant box on your Starter Checklist — otherwise, repayments will not be taken from your first paycheck and you may face a catch-up deduction later. Your employer cannot set up student loan deductions without this information.
What you should do on day one
- Provide your P45 to HR or payroll as early as possible
- If no P45, complete the Starter Checklist carefully and select the correct statement
- Check your first payslip and confirm your tax code
- If your code looks wrong, contact HMRC via the Personal Tax Account or by phone
Frequently asked questions
How long until my tax code is corrected?
HMRC typically updates your tax code within 2-4 weeks of receiving RTI data from your new employer. If it has not corrected after 6 weeks, contact HMRC directly with your National Insurance number and employer details.
Can I get an emergency tax refund immediately?
If you are significantly overpaying, you can contact HMRC to request an early correction rather than waiting for the year-end P800. HMRC will issue a new tax code to your employer, reducing deductions in subsequent months to repay the overpayment.