How to calculate your net pay & check your tax code

How to ensure you are on the right PAYE tax code

1. Go to PAYE calculator above.
2. Make sure the ‘tax year’ is set to the current one and the right age band is selected.
3. Don’t worry about the ‘tax code’ field or the email field but fill/tick the others if relevant.
4. Then enter your annual gross salary and click ‘calculate’.
5. The calculator will tell you the net amount you should be receiving each month (or week) after tax and national insurance. If this number pretty much matches the net amountthat goes into your bank account each month (or the net amount on your payslip), that’s great. It would seem that you are paying the right amount of income tax and that you are entitled to the full income tax personal allowance (which is the amount you can earn tax-free).

But if the figure was not what you had expected then:

1. Get your latest payslip.
2. Check that there aren’t any deductions that you forgot to include in the calculator, such as pension contributions.
3. If there aren’t then check the tax code printed on the payslip – it’s unlikely to be the bog-standard 1000L.
4. Note down the tax code (made up of three numbers and a letter). Now go to https://www.hmrc.gov.uk/incometax/codes-basics.htm where you’ll find a full explanation of what your tax code means.
5. If you think your tax code is wrong then contact HMRC and inform them of the error. If you’ve overpaid tax then you can expect a rebate via your pay packet.