Person using smartphone with digital graphics projected over the top themed around Tax and finance
A quick win: Encouraging employees to check their PAYE codes

Many employees will have received updated PAYE tax codes from HMRC for the new tax year. Ensuring they are on the correct tax code is essential for employees if they wish to avoid paying either too little, or too much tax. 

While employers do not set tax codes, they are often the first point of contact when an employee notices unexpected changes in net pay. This can lead to confusion, as employees often incorrectly assume that their employers can update PAYE codes or identify why changes in PAYE codes have occurred. 

Encouraging staff to regularly use their personal tax account or download and use the HMRC app can significantly reduce confusion, prevent payroll disputes, and support smoother business operations.

What are the advantages?

  • Incorrect or unexpected tax codes frequently lead to questions about changes in take‑home pay or unexpected deductions. When employees use HMRC tools (such as Check what your tax code means, and Check your Income Tax for the current year) to check their codes, they can quickly identify why a code has changed and correct any details directly with HMRC, resulting in fewer internal payroll queries.
  • Employees who understand and monitor their tax code help ensure that personal and employment information is accurate with HMRC. This reduces the risk of emergency codes, incorrect deductions, or tax recalculations, supporting more accurate payroll processing and reducing any need to correct under- or over-payments after the end of the tax year.
  • Understanding tax codes gives employees clarity and confidence around their pay. This helps reduce financial anxieties caused by unexpected deductions and supports a positive workplace environment.
  • HMRC’s digital services are simple, secure, and accessible 24/7. Encouraging employees to use them can reduce demands on internal payroll teams and result in swift updates to PAYE codes.
  • Employers must operate the tax code HMRC issues and cannot change or correct it. Encouraging employees to check their tax codes clarifies roles and ensures staff understand HMRC is responsible for any amendments.

Conclusion

Encouraging employees to use HMRC’s tax code checking tools empowers staff, improves payroll accuracy, reduces administrative load, and supports financial wellbeing. Employers who promote these digital services should benefit from smoother payroll processes and a well-informed workforce.

Further information and resources

Employees may find the following ATT videos useful in understanding how PAYE codes operate.

TikTok- New Tax Year New Tax Code

YouTube- How to Check and Change your Tax Code

YouTube- Paying Higer Rate Tax

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

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