Tax Code SD2 Explained
SD2 taxes all income from this source at Scotland's Intermediate rate of 21% — with no Personal Allowance. The Intermediate rate band runs from £27,492 to £43,662. SD2 is applied when additional income is expected to fall into this bracket, resulting in slightly more tax than the standard SBR/SD1 codes. There is no direct England equivalent to the Scottish Intermediate rate.
Who gets tax code SD2?
Scottish residents with multiple income sources, where additional income falls into the Intermediate rate band. This code is specific to Scotland's unique multi-band tax structure. If your total income puts additional earnings between £27,492 and £43,662, HMRC may issue SD2 for the secondary income source.
Scottish Income Tax: Scotland sets its own income tax rates. For 2025-26, Scottish rates diverge meaningfully from England above ~£30,000 — the 42% Higher rate kicks in at £43,663 versus £50,270 in England. National Insurance is the same as the rest of the UK.
Take-home pay on tax code SD2 — 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 | £4,200 | £594 | £15,206 | 21.0% |
| £25,000 | £5,250 | £994 | £18,756 | 21.0% |
| £30,000 | £6,300 | £1,394 | £22,306 | 21.0% |
| £35,000 | £7,350 | £1,794 | £25,856 | 21.0% |
| £40,000 | £8,400 | £2,194 | £29,406 | 21.0% |
| £45,000 | £9,450 | £2,594 | £32,956 | 21.0% |
| £50,000 | £10,500 | £2,994 | £36,506 | 21.0% |
| £60,000 | £12,600 | £3,211 | £44,189 | 21.0% |
| £75,000 | £15,750 | £3,511 | £55,739 | 21.0% |
| £100,000 | £21,000 | £4,011 | £74,989 | 21.0% |
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 SD2, 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 SD2 mean?
SD2 taxes all income from this source at Scotland's Intermediate rate of 21% — with no Personal Allowance. The Intermediate rate band runs from £27,492 to £43,662. SD2 is applied when additional income is expected to fall into this bracket, resulting in slightly more tax than the standard SBR/SD1 codes. There is no direct England equivalent to the Scottish Intermediate rate.
Who gets tax code SD2?
Scottish residents with multiple income sources, where additional income falls into the Intermediate rate band. This code is specific to Scotland's unique multi-band tax structure. If your total income puts additional earnings between £27,492 and £43,662, HMRC may issue SD2 for the secondary income source.
How much do I take home on tax code SD2 earning £30,000?
On tax code SD2 with a £30,000 salary, you take home £22,306 per year (£1,859 per month) after Income Tax of £6,300.
Is tax code SD2 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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