K Tax Code Calculator UK 2026

A K tax code means your deductions (company benefits, unpaid tax from previous years, or taxable state benefits) exceed your £12,570 personal allowance. Instead of reducing taxable income like normal codes, K codes add to it. For example, K500 adds £5,000 to your taxable income, meaning you pay tax as if you earn an extra £5,000 annually.

HMRC uses K codes to collect tax on income or benefits that aren't being taxed elsewhere. The system ensures you pay the correct annual tax amount through your wages, with protection ensuring deductions never exceed 50% of your gross pay in any period.

Multiply the number in your K code by 10 to find the amount added to your taxable income annually. For K475, that's £4,750 added. Add this to your salary, then calculate income tax and National Insurance on the total. For £30,000 salary + £4,750 K amount = £34,750 taxable. Tax is calculated at 20%, 40%, or 45% depending on bands, plus National Insurance at 10%/2%.

HMRC ensures K code deductions never exceed 50% of your gross pay per pay period. If the calculated tax exceeds this limit, the excess is spread over additional pay periods to protect your take-home pay. Use our calculator to see exact monthly deductions based on your specific situation.

You receive a K tax code when your total deductions exceed £12,570. Common causes: (1) Company benefits like company cars, private health insurance, or interest-free loans above £10,000; (2) Receiving State Pension while still working; (3) Owing tax from previous years that HMRC is collecting through your wages; (4) Multiple income sources where combined deductions exceed your allowance.

Check your latest P11D form from your employer to see all taxable benefits included in your K code. If you believe the code is wrong - outdated benefit values, debts already paid, or benefits you no longer receive - contact HMRC immediately on 0300 200 3300 to request correction.

HMRC's 50% protection rule limits K code tax deductions to 50% of your gross pay in any single pay period. This ensures you always receive at least half your wages, preventing excessive deductions that would leave you unable to cover living expenses. If your calculated K code tax exceeds 50% of gross pay, HMRC automatically caps it at 50%.

The remaining tax debt spreads over future pay periods. For example, if your monthly gross is £2,500 and your K code would deduct £1,500, it's capped at £1,250 (50%). The extra £250 carries forward to subsequent months until the full debt is collected. This protection applies to all employees with K codes regardless of income level.

Extra tax depends on your K code number and your tax rate. K500 adds £5,000 to taxable income. At basic rate (20%), that's £1,000 extra income tax plus approximately £500 National Insurance - £1,500 total annually or £125 monthly. At higher rate (40%), the same K500 costs £2,000 income tax plus £500 NI - £2,500 total annually or £208 monthly.

The K amount is added before calculating tax, so you pay both income tax and National Insurance on your salary plus the K amount. Higher earners in 40% or 45% tax bands pay significantly more per pound of K code than basic rate taxpayers. Our calculator shows exact costs based on your specific salary and K code combination.

Yes, contact HMRC immediately if you believe your K tax code is incorrect. Valid challenges include: (1) Company benefit values are wrong or outdated; (2) Previous year tax debts have already been paid; (3) State Pension amounts don't match actual payments; (4) Benefits listed you don't receive; (5) Multiple jobs/pensions with incorrectly allocated allowances.

Gather evidence before calling HMRC: recent payslips, P11D benefit statements, bank statements proving previous tax payments, or pension statements. Call HMRC's helpline on 0300 200 3300. They can adjust codes immediately if their information is wrong, issuing corrected codes to your employer within 3-5 days. Refunds for overpaid tax arrive 4-6 weeks after correction via bank transfer or adjusted future deductions.

Company benefits are taxable perks valued by HMRC using official tables. Common benefits include company cars (valued by CO2 emissions and list price), private health insurance (actual cost to employer), interest-free loans above £10,000, gym memberships, and accommodation. HMRC totals all benefits and subtracts your £12,570 personal allowance. If benefits exceed the allowance, you receive a K code.

For example, a £20,000 company car minus £12,570 allowance leaves £7,430 excess, converting to K743 (£7,430 ÷ 10). Your employer reports benefits annually via P11D forms. Values can change yearly even if the benefit doesn't - car emissions bands adjust, insurance premiums change. Check your P11D matches actual benefits received and challenge discrepancies immediately with HMRC.

K tax codes can change mid-year if circumstances alter: (1) Company benefits change - new car, benefit removed, insurance cancelled; (2) Previous year tax debts are fully paid off; (3) State Pension starts or stops; (4) HMRC corrects errors in their records; (5) You change jobs and allowances are reallocated between employments.

Check your payslip monthly to spot code changes early. New K codes appear with the first payslip after HMRC notifies your employer (typically 1-2 pay periods after HMRC's decision). If your circumstances change, don't wait for HMRC - contact them proactively to request code updates. Use our tax code checker to verify your code matches your current situation.