Why has my tax increased on my payslip?

Your gross pay increased

Overtime, a bonus, commission or a pay rise can push more income into a higher tax band. PAYE can therefore rise by more than the change you are used to seeing.

Your tax code changed

A different tax code can alter the tax-free allowance or rate payroll applies. Check the code printed on the payslip against HMRC’s record. If they differ, speak to payroll; if the HMRC code itself appears wrong, follow HMRC’s tax-code correction process.

PAYE is catching up cumulatively

Most tax codes are operated cumulatively. Payroll can take account of earlier pay and tax in the tax year, so a later payslip may correct an earlier under- or over-deduction.

You are on Week 1 or Month 1 treatment

W1 and M1 treatment ignores earlier pay and tax and calculates the current period in isolation. It can produce a different result from a cumulative code, particularly after a job or tax-code change.

A second job or pension uses a flat-rate code

BR and D codes are often associated with additional sources of income. They can tax all pay from that employment at a specified rate rather than giving another Personal Allowance.

What to do next

Check the tax code, gross pay and PAYE amount on the payslip. Then use the NetSlip Payslip Checker as an independent sense-check. A difference is a reason to investigate, not proof of a payroll error.

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