Starting a new job and finding your first payslip has taken a much bigger chunk of tax than you expected is one of the most common payroll surprises there is. Usually, the cause is an emergency tax code, a temporary setting your employer has to use when they don't yet have your full tax history. It's rarely a mistake in the sense of anyone doing anything wrong, but it can genuinely cost you money in the short term, and it's worth understanding exactly why.
For the full breakdown of how tax codes work more generally, see our tax codes explained guide. This one focuses specifically on the emergency scenario.
Why It Happens
An emergency code gets applied when your new employer doesn't have enough information to work out your tax cumulatively, meaning based on your total income and allowance used so far this tax year. Instead, they tax you on a non-cumulative, or "emergency", basis, treating each pay period in isolation.
This most commonly happens when starting a job without a P45 from your previous employer, or when the P45 arrives too late for the first payroll run. It also happens if you're starting your first UK job, moving from self-employment into employment, or coming off certain benefits partway through the tax year. It's also a common feature of the tax year in which a redundancy payment is processed, covered in our redundancy pay tax guide.
The Starter Checklist Decides Which Code You Get
If you don't have a P45, your new employer should give you a Starter Checklist, the form that replaced the old P46. It asks you to pick one of three statements, and your answer directly determines your tax code from day one.
| Statement | Situation | Resulting code |
|---|---|---|
| A | First job since 6 April, no other taxable income or benefits this tax year | 1257L, cumulative (not emergency) |
| B | Only job now, but had another job, or JSA/ESA/Incapacity Benefit, since 6 April | 1257L, emergency W1/M1 basis |
| C | Currently have another job or pension running alongside this one | BR, all income taxed at 20% |
Statement A is the only one of the three that isn't actually an emergency code, it gets you the standard cumulative allowance from the start. Statement B is the classic emergency scenario. If you don't complete a checklist at all and have no P45, employers are generally required to fall back to 0T, no allowance at all, which is even less favourable than W1/M1 until it's corrected.
Picking the wrong statement is a genuinely common mistake, and it can go either way. Choosing A when B applies can lead to underpaying tax that gets clawed back later. Choosing B or C when A applies means paying more than necessary in the meantime. Reading the three options carefully before ticking one is worth the extra thirty seconds.
What It Actually Costs
Here's where the emergency basis bites. Under a normal cumulative code, any unused allowance from earlier in the tax year carries forward. If you were out of work for a few months, that unused allowance builds up and shelters your first pay cheque in a new job. Under W1/M1, none of that carries forward. Every pay period only gets its own slice of the annual allowance, roughly £1,047.50 a month, regardless of what happened earlier in the year.
Say someone was out of work from April to the end of July, then started a new job on 1 August earning £3,000 a month, placed on an emergency 1257L W1/M1 code under Statement B. In a fair cumulative world, they'd have four months of unused allowance, over £4,000, available to offset that first pay cheque, meaning no tax due in August at all. Under the emergency basis, only that month's £1,047.50 slice is available, so £1,952.50 becomes taxable, and 20% of that, £390.50, is deducted as tax they don't actually owe yet. That's £390.50 overpaid in the first month alone, and it continues at a similar rate each month until the code is corrected.
How Long It Lasts
An emergency code isn't permanent. It typically resolves in one of two ways: your employer receives your P45 details or starter checklist information and processes it through payroll, usually correcting things within a few pay periods, or HMRC issues an updated code directly once they've matched up your records, which can take a little longer.
Any tax overpaid while on the emergency basis is normally refunded automatically through your pay once the correct code is applied, provided it happens before the tax year ends. If the tax year ends before it's corrected, HMRC typically reconciles it afterwards through a P800 calculation, and refunds any overpayment directly.
Ask your employer: If your first payslip looks higher-taxed than expected, ask payroll directly whether you're on an emergency code and whether they've received your P45 or starter checklist yet. It's a normal question, and getting the right information to them faster is the single quickest way to get it corrected.
How to Fix It
If you have a P45 from your previous employer, giving it to your new payroll team as soon as possible is the fastest fix, since it gives them your income and tax details for the year so far. If you don't have one, completing the starter checklist accurately, picking the statement that actually matches your situation, achieves much the same thing.
If neither resolves it within a reasonable time, contacting HMRC directly is worth doing, particularly if you're confident your code is wrong and it's affecting your ability to cover normal expenses. They can issue a corrected code directly to your employer.