Imagine starting a new job, opening your first payslip, and finding out you have been taxed almost twice as much as you should have been. It feels unfair - and honestly, it is a shock. But it happens to thousands of people across the UK every year. It even happens to people who take money out of their pension for the first time.
This is called emergency tax, and the good news is: in most cases, you can get your money back.
This guide explains exactly what emergency tax is, why it happens, how to spot it on your payslip, and - most importantly - the steps you need to take to claim a refund.
What Is Emergency Tax?
Emergency tax is not a punishment. It is simply a temporary measure that HMRC (His Majesty's Revenue and Customs) uses when they do not have enough information to work out your correct tax code.
Every person who pays tax through PAYE (Pay As You Earn) gets a tax code. That code tells your employer or pension provider how much of your income is tax-free and how much to deduct each month. When your employer does not have that code, they cannot calculate your tax properly - so they apply an emergency rate instead.
The problem with an emergency tax code is that it does not look at what you have already earned or already paid in tax earlier in the year. It treats each pay period on its own, as if you had just started earning from scratch. So if you get paid £2,000 in one month, an emergency code assumes you will earn £2,000 every month for the full year - and taxes you based on that total, often much more than you actually owe.
How to Spot an Emergency Tax Code on Your Payslip
The easiest way to check if you are on an emergency tax code is to look at your payslip. Your tax code is usually shown near the top, often in the upper right-hand corner.
If your tax code ends in any of the following, you are on an emergency rate:
- W1 - used when you are paid weekly (for example: 1257L W1)
- M1 - used when you are paid monthly (for example: 1257L M1)
- X - used when your pay dates vary or are irregular
You might also see the word NONCUM on your payslip, depending on which payroll software your employer uses. That stands for "non-cumulative" and means the same thing - your tax is being calculated on each pay period alone rather than across the full year.
You could also be placed on the code BR (which means Basic Rate, taxing all your income at 20%) or 0T (zero-T, which means all of your pay is taxed with no Personal Allowance at all). Both of these can result in significantly higher tax deductions than you would normally face.
Why Does Emergency Tax Happen?
There are several common reasons why HMRC might not have your correct tax details in time.
Starting a new job is the most common trigger. When you move from one employer to another, your new employer needs your previous income and tax details to set up your code correctly. If they do not have this information when your first payday arrives, they use an emergency code as a temporary measure instead.
- Starting a new job without a P45
- Moving from self-employment to employment
- Working multiple jobs
- Being a student working during holidays
- Switching between full-time and part-time work
- Starting company benefits
- Beginning to receive the State Pension
What Rate Do You Actually Pay on Emergency Tax?
When you are placed on an emergency tax code, you could find yourself being taxed in one of two ways. In some cases, HMRC applies the basic rate of 20% to all of your earnings. In others, tax is calculated as if your pay that month represents your full annual income - which can push parts of it into the higher rate band (40%), even if your actual yearly earnings would never reach that level.
For most people, this results in overpaying tax. However, additional rate taxpayers can sometimes end up underpaying on an emergency code, creating a different issue later.
Emergency Tax on Pension Withdrawals - A Separate Problem
Emergency tax does not only happen when you start a new job. It also regularly catches people off guard when they take money out of a pension for the first time.
When someone accesses a defined contribution pension, the pension provider often does not have an up-to-date tax code. As a result, they apply the emergency tax code on a month 1 basis.
Someone taking a £30,000 pension payment in a single month could see more than £11,000 deducted in tax under emergency tax rules, even if their annual income would not normally justify that level of tax.
What Happens After HMRC Gets Your Details?
Once your new employer passes your information to HMRC - or once they receive your P45 - HMRC usually updates your tax code within 35 days of you starting your job.
Your employer then applies the corrected code and any overpaid tax is normally refunded through your next salary payment.
How to Claim Back Emergency Tax - Step by Step
- Check your payslip. Look for W1, M1, X, BR, 0T or NONCUM next to your tax code.
- Give your employer your P45. If you have one from your last job, hand it over as soon as possible. If not, complete the HMRC starter checklist.
- Check your code in your Personal Tax Account or the HMRC app. You can see the code HMRC has issued and update your income details.
- Wait for the code to be corrected. Once HMRC issues the right code, your employer normally refunds the overpaid tax through payroll on a later payday.
- Watch for a P800 or claim directly. If the tax year has ended, or you have left the job, HMRC may send a P800 calculation. For pension withdrawals you can reclaim using forms P55, P53Z or P50Z.
How Long Does a Refund Take?
Once HMRC accepts your claim, refunds typically arrive within five days to eight weeks depending on the claim method and HMRC processing times.
How to Avoid Emergency Tax in the Future
- Give your P45 to your new employer before your first payday.
- Complete a starter checklist if you do not have a P45.
- Check your tax code regularly.
- Speak with your pension provider before making large pension withdrawals.
What If Your Tax Code Seems Wrong After the Fix?
If your code still appears incorrect after more than 35 days, check your tax code through your HMRC Personal Tax Account or contact HMRC directly.
Frequently Asked Questions
Is emergency tax permanent?
No. Emergency tax is normally temporary and is corrected once HMRC receives the right information.
Can I be emergency taxed on more than one job?
Yes. Multiple jobs can lead to BR or other emergency tax codes being applied.
What is a P800?
A P800 is a letter from HMRC showing whether you have paid too much or too little tax.
Can emergency tax affect pension withdrawals?
Yes. First-time pension withdrawals are one of the most common situations where emergency tax is applied.
How far back can I claim?
You can generally claim overpaid tax for up to four years after the end of the relevant tax year.