Guide

How to check you are paying the right tax

PAYE is accurate when its inputs are accurate, and nobody checks the inputs. This is a practical audit anyone can run on their own payslip in about ten minutes, with no accountant and no spreadsheet. Work through it once a year, and once more after any job change, pay rise or benefit change.

What you need

Your most recent payslip, your P60 if the tax year has ended, and access to your personal tax account. Open the take-home pay calculator in another tab.

Step 1: check the tax code

Find the code on your payslip. For most people with one job and no taxable benefits it should be 1257L, or S1257L in Scotland and C1257L in Wales. Then look for the things that should not be there.

W1, M1 or X after the code means you are on an emergency code.
BR, D0 or D1 on your main job means HMRC thinks it is a second job.
0T means no allowance at all, usually a new job without a P45 or starter checklist.
A number well below 1257 means deductions have been applied. Your coding notice or personal tax account shows exactly what they are.
A K prefix means deductions exceed allowances and an amount is being added to your taxable pay.

The full decoder is in tax codes explained.

Step 2: check the region

Scottish rates apply based on where you live, not where you work, and an S prefix that is missing or wrongly present will produce a bill or refund at year end. If you have moved home in the last two years, this is the single most common cause of a wrong code. The difference is real money above about £33,500 of income, as our comparison shows.

Step 3: check National Insurance

On a standard category A letter, your monthly National Insurance should be 8% of pay between £1,048 and £4,189, plus 2% of anything above. On a £4,000 monthly gross that is 8% of £2,952, which is £236.16. If your figure is nowhere near, check the category letter: C means no employee contribution and applies only above state pension age, while H, M and V are apprentice, under-21 and veteran categories that change the employer rate.

Step 4: check the student loan

Confirm the plan number matches the loan you actually have, and that a postgraduate loan is being deducted if you have one. A wrong plan number is easy to introduce on a starter checklist and can cost or save you hundreds a year in the wrong direction. The thresholds and worked figures are in student loan plans compared.

Step 5: reconcile the year to date

This is the step that catches everything the others miss. Take the year-to-date taxable pay from your payslip and divide it by the tax period number - month 1 is April, month 12 is March. Multiply by twelve to get an annualised figure, and put that into the calculator with your pension percentage and student loan plan.

Worked example

Your October payslip is tax period 7. Year-to-date taxable pay is £24,500 and year-to-date tax is £2,440. Annualised, that is £42,000 of pay. The calculator says £42,000 should produce £5,886 of income tax for the year, which is £490.50 a month and £3,433.50 by period 7. Your actual figure is nearly £1,000 lower, so something has increased your allowance - most likely job expenses in your code, or a Marriage Allowance transfer. Worth understanding now rather than discovering as an underpayment later.

The same test works in reverse. If your year-to-date tax is materially higher than the calculator implies, and your pay has been steady, the cause is nearly always the code rather than payroll.

Step 6: check the things PAYE cannot see

Higher-rate pension relief. If you are in a relief-at-source scheme and pay tax above the basic rate, part of your relief is only given when you claim it. See pension tax relief: the three methods.
Marriage Allowance. If one of you earns below the personal allowance and the other is a basic-rate taxpayer, transferring £1,260 of allowance is worth up to £252 a year and can be backdated.
Job expenses. Professional subscriptions, required uniforms and unreimbursed business mileage can be claimed and are often given through your code.
Benefits you no longer have. A company car or medical policy that ended is often still sitting in your code, quietly costing you every month.
Adjusted net income near £100,000. The taper and the childcare cliff edge both bite here - see the personal allowance taper.

Step 7: fix it

Wrong pay, hours, overtime or pension percentage: talk to payroll. Only your employer can correct these.
Wrong code, wrong benefits, wrong student loan plan: update your personal tax account. HMRC issues a revised code and a cumulative code refunds the difference through payroll automatically.
Prior tax years: look for a P800 calculation, which HMRC issues between June and March. If none arrives and you believe you overpaid, claim directly at gov.uk. Claims are generally allowed for up to four years after the end of the tax year.
Never use a refund company for a straightforward PAYE claim. The process is free and takes minutes.

Run it now

Start with the take-home pay calculator and your latest payslip side by side. If the two do not agree, understanding your payslip explains which line to look at next.

Common questions

How do I know if I have paid too much tax?

Compare the annual figures your salary should produce with the year-to-date totals on your latest payslip, scaled to a full year. If your tax is materially higher than the calculator suggests and your pay has been steady, the usual cause is your tax code rather than payroll arithmetic.

What is a P800?

It is the tax calculation letter HMRC sends after the end of the tax year when your PAYE record shows an over or underpayment. HMRC sends them between June and March of the following tax year. You only get one if you are employed or receiving a pension - Self Assessment taxpayers settle through their return instead.

How far back can I reclaim overpaid tax?

Claims for earlier tax years are generally allowed for up to four years after the end of the tax year concerned, so several years can sometimes be reclaimed at once. Start at gov.uk rather than through a refund company, which will take a share of anything you recover.

Should I use a tax refund company?

Rarely. Claiming directly through your personal tax account or by contacting HMRC costs nothing, and refund companies typically take a substantial percentage plus a fee. Be particularly wary of any arrangement that assigns future refunds to a third party.

Written for the 2026/27 tax year. This audit covers common PAYE situations and is general information, not personal tax advice. If your affairs include multiple employments, significant investment income or Self Assessment, take proper advice.