Tax Code K496 Explained
A K code works in reverse to normal tax codes — instead of reducing your taxable income, it increases it. K496 means £4,960 is added to your income for tax purposes (496 × £10 = £4,960). This results in more Income Tax being deducted each pay period. K codes arise when the value of tax adjustments owed exceeds your Personal Allowance. HMRC applies a 50% regulatory limit — your employer cannot deduct more than 50% of your gross pay in tax.
Who gets tax code K496?
Employees with significant untaxed income or benefits in kind that exceed their Personal Allowance. Common causes: a large company car benefit, private medical insurance with a high P11D value, or substantial underpaid tax from prior years being collected through PAYE. The K number represents the extra amount added to taxable income divided by 10.
K code — negative Personal Allowance: K codes add to your taxable income rather than reducing it. Your employer cannot deduct more than 50% of your gross pay in Income Tax under the regulatory limit. If your take-home seems very low, contact HMRC to verify the code.
Take-home pay on tax code K496 — 2025-26 examples
Examples below show Income Tax and take-home pay at common salary levels. National Insurance (NI) is also shown separately — NI is not affected by your tax code and applies on the same basis for all employees.
| Gross Salary | Income Tax | NI (est.) | Take-Home | Effective IT Rate |
|---|---|---|---|---|
| £20,000 | £4,992 | £594 | £14,414 | 25.0% |
| £25,000 | £5,992 | £994 | £18,014 | 24.0% |
| £30,000 | £6,992 | £1,394 | £21,614 | 23.3% |
| £35,000 | £8,444 | £1,794 | £24,762 | 24.1% |
| £40,000 | £10,444 | £2,194 | £27,362 | 26.1% |
| £45,000 | £12,444 | £2,594 | £29,962 | 27.7% |
| £50,000 | £14,444 | £2,994 | £32,562 | 28.9% |
| £60,000 | £18,444 | £3,211 | £38,345 | 30.7% |
| £75,000 | £24,444 | £3,511 | £47,045 | 32.6% |
| £100,000 | £34,444 | £4,011 | £61,545 | 34.4% |
Take-home = Gross − Income Tax − National Insurance. No pension, student loan or other deductions included. NI calculated at 8% between £12,570–£50,270 and 2% above. Effective IT Rate shows Income Tax as a percentage of gross salary.
If you have tax code K496, here's what you should know
- Your tax code appears on your payslip, P60, and any correspondence from HMRC about your PAYE tax.
- Your employer uses this code to calculate how much Income Tax to deduct from each pay period — they do not set it themselves.
- If your circumstances change (new job, change in benefits, marriage allowance), your code should update automatically — but it is worth checking.
- You can view and update your tax code online via your Personal Tax Account at gov.uk.
- If you think your code is wrong, contact HMRC on 0300 200 3300 or use the HMRC app.
- An incorrect tax code can mean you overpay or underpay tax — overpayments are refunded, underpayments are collected in future years.
Frequently asked questions
What does tax code K496 mean?
A K code works in reverse to normal tax codes — instead of reducing your taxable income, it increases it. K496 means £4,960 is added to your income for tax purposes (496 × £10 = £4,960). This results in more Income Tax being deducted each pay period. K codes arise when the value of tax adjustments owed exceeds your Personal Allowance. HMRC applies a 50% regulatory limit — your employer cannot deduct more than 50% of your gross pay in tax.
Who gets tax code K496?
Employees with significant untaxed income or benefits in kind that exceed their Personal Allowance. Common causes: a large company car benefit, private medical insurance with a high P11D value, or substantial underpaid tax from prior years being collected through PAYE. The K number represents the extra amount added to taxable income divided by 10.
How much do I take home on tax code K496 earning £30,000?
On tax code K496 with a £30,000 salary, you take home £21,614 per year (£1,801 per month) after Income Tax of £6,992.
Is tax code K496 correct for me?
Your tax code is set by HMRC based on your individual circumstances. If you believe your tax code is wrong, contact HMRC on 0300 200 3300 or check your Personal Tax Account at gov.uk. An incorrect code could mean you are paying too much or too little tax.
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