K Tax Code Meaning
A K tax code means your deductions exceed your allowances, so extra tax is taken from your pay. Learn what causes it and what to do.
What Does K Mean?
A K tax code indicates your tax deductions are greater than your Personal Allowance, resulting in a 'negative' allowance. The number after K shows how much is added to your taxable income. For example, K500 means £5,000 is added to your income for tax purposes.
How K Tax Code Works
With a K code, HMRC collects extra tax through PAYE by treating you as if you earn more than you actually do. The 'K amount' is added to your actual earnings, and tax is calculated on this higher figure. This ensures you pay the correct tax throughout the year rather than owing a lump sum later.
How K Affects Your Take-Home Pay
Example: £30,000 with K500 code
- Actual salary: £30,000
- K500 adds: £5,000
- Taxable amount: £35,000
- Income Tax on £35,000: £4,486 (20% on £22,430 after allowance)
- Extra tax due to K code: ~£1,000
- Total annual tax: £5,486
Take-home pay: Approximately £24,514 per year (£2,043 per month)
When is K Tax Code Used?
- •You owe tax from previous years and HMRC is collecting it through PAYE
- •You have company benefits (car, medical insurance) that exceed your allowance
- •You receive the State Pension plus employment income
- •You have untaxed income that HMRC knows about but isn't being taxed elsewhere
How to Check Your Tax Code
You can find your current tax code in several places:
- •Payslip: Look at the top of your monthly payslip
- •HMRC online: Sign in to your personal tax account at gov.uk
- •P60: Your end-of-year certificate from your employer
- •PAYE Coding Notice: Letter from HMRC when your code changes
Calculate Your Take-Home Pay
See exactly how K affects your salary with our free calculator