A mid-year audit for UK payslips. How to check tax code, National Insurance category, student loan plan, and pension before the errors get expensive.
It is mid-August, which means the 2026/27 tax year is already five payslips old. Month 5 of the PAYE year runs from 6 August to 5 September, so whatever your employer got right or wrong back in April has now been repeated four or five times over.
That is the argument for a mid-year audit. Most people check tax code once, in April, when the new code notice lands, and then never look again. April is when errors get introduced. August is when they have had enough time to cost real money, and it is also the last comfortable window to fix them through your payslip rather than waiting on a refund after the tax year ends.
You are confirming that four separate settings on your payslip still match your real circumstances: your tax code, your National Insurance category letter, your student loan plan, and your pension deduction.
Most people check tax code and stop there, which is the mistake. The important bit is that these four are set independently, by different people, using different data. Your tax code comes from HMRC. Your National Insurance category letter and student loan plan come from your employer’s payroll, usually from what you ticked on a starter checklist. Your pension comes from your auto-enrolment scheme. Any one of them can be wrong on its own while the other three are perfect.
Work through these in order, because they are ranked by how much you should trust them.
1257L, or 1257L W1, or BR, or S1257L if you are a Scottish taxpayer.If your payslip and HMRC disagree, your employer is running on stale data and payroll needs to apply the newer code. If they agree and the code still looks wrong, HMRC is the one to correct it.
Most employees are category A, which means 8 per cent on monthly earnings between £1,048 and £4,189, then 2 per cent on anything above £4,189. Category M applies to under 21s, H to apprentices under 25, and C to people over State Pension age.
The one that bites is age. If you turned 21 during the year and payroll left you on M, or you passed State Pension age and nobody moved you to C, you are paying National Insurance you do not owe. Your tax code has no influence here at all, so checking your code alone will never surface this.
Four plans, four thresholds, and payroll picks one from what you declared when you joined.
| Plan | Annual threshold | Monthly | Rate |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% |
| Plan 2 | £29,385 | £2,448 | 9% |
| Plan 5 | £25,000 | £2,083 | 9% |
| Postgraduate | £21,000 | £1,750 | 6% |
Being on the wrong plan is common for anyone who started a course around August 2023, the boundary between Plan 2 and Plan 5. The gap between those two thresholds is £4,385 a year of income, which at 9 per cent is roughly £33 a month of difference. Wrong in one direction and you are overpaying. Wrong in the other and you are quietly building an underpayment that catches up with you later.
The right hand column of your payslip, the cumulative or year to date figures, is the most useful part of the whole document and almost nobody reads it. By month 5 you should be able to divide your year to date gross by five and get roughly your monthly pay. If it is materially out, something changed that you did not notice, most often a pension rate increase or a bonus that got taxed oddly.
Auto-enrolment minimums are 5 per cent from you and 3 per cent from your employer, so if your deduction has drifted away from that, someone changed something.
Say you earn £34,000, so £2,833.33 a month. You changed jobs in April and your new employer never received your P45, so payroll defaulted you to BR instead of 1257L.
On the correct code, 1257L:
On BR, which taxes every pound at basic rate with no allowance:
That is £209.50 a month of tax you should not be paying. Across five payslips it is £1,047.50, which is not a rounding error, it is a holiday. And it will keep growing at £209.50 a month until somebody notices.
They are almost certainly right if you have one job, no company car or medical insurance, no tax owed from an earlier year, you are on 1257L, your National Insurance letter is A, and your student loan plan matches when your course started.
Treat these as warning signs worth ten minutes:
W1 or M1 after your code. Non-cumulative, so payroll ignores your year to date position. Common after a job change and usually means you are overpaying.BR, 0T, or D0 on your main job. These are second-job and no-information codes. On your only job, one of them is a mistake.K code. Your deductions now exceed your allowance. Sometimes correct, often worth challenging.S prefix when you live in Scotland, or one when you do not.Route matters, because half of these are not HMRC’s to fix.
Payroll fixes: National Insurance category letter, student loan plan, pension rate. Email your payroll team with what you believe is correct and why. These are employer settings and HMRC will not touch them.
HMRC fixes: your tax code. Update your details in the HMRC app first, since a lot of code errors come from HMRC holding an out of date picture of your income or benefits. If the app does not resolve it, call 0300 200 3300.
The timing is the part worth acting on. Fix a tax code before 5 April while you are on a cumulative code, and payroll recalculates your year to date position at the next run, so the overpayment lands in that payslip. Leave it past 5 April and HMRC reconciles it afterwards with a P800 calculation, which is a slower and much less satisfying way to get your own money back.
The core numbers have not moved. The personal allowance is still £12,570 and frozen until April 2028. Higher rate still starts at £50,270 and additional rate at £125,140. Employee National Insurance is still 8 per cent and 2 per cent.
What did change in April 2026 is that HMRC moved most P2 tax code notices to digital first. Instead of a letter, your code change appears in your online account, and the notification is easy to miss. That is precisely why it pays to check tax code notices online this year: yours may have changed in June or July without anything landing on your doormat.
If you want the fast version, the NetPay app takes your pay and your code and shows what your take-home should be, including National Insurance, pension, student loan, and salary sacrifice, so you can compare it against what actually landed. Free to download.
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NetPay does this maths for every shift, invoice and payslip, automatically.
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Compare three sources. Your latest payslip, your HMRC app or Personal Tax Account, and your last P60 or P45. If your payslip and HMRC disagree, your employer's payroll is running on stale data and needs updating. If they agree but the code still looks wrong for your circumstances, HMRC is the one to call on 0300 200 3300.
April is when tax code errors are introduced, because that is when new codes are issued and jobs often change. By August you have had four or five payslips on the same code, so an error has repeated itself several times and is large enough to spot. There is also still enough of the tax year left for a correction to come back through your payslip rather than as a refund after 5 April.
It is the single letter on your payslip that tells payroll which National Insurance rates to apply to you. Most employees are category A, which is 8 per cent on monthly earnings between £1,048 and £4,189 and 2 per cent above that. Categories M and H are for under 21s and apprentices under 25, and C is for people over State Pension age. Your employer sets it, so a wrong letter is fixed by payroll, not HMRC.
Yes, in most cases. If your tax code is corrected before 5 April and you are on a cumulative code, payroll recalculates your year to date position at the next pay run and the overpayment comes back in that payslip. If the correction happens after the tax year ends, HMRC reconciles it and sends a P800 calculation instead, which is slower.
Want to see your actual take-home pay?
NetPay UK works out your real net pay after tax, NI, pension and salary sacrifice, for hourly, shift and variable-income workers. Free to download.
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A note on financial advice: NetPay UK calculates take-home pay based on official HMRC tax rules. This article reflects rules in force at the time of publication (16 August 2026). Tax rules change. For complex situations, consult a qualified UK accountant or visit gov.uk/income-tax.
