K tax codes explained (K475 example)
A K code such as K475 means you have taxable income that is not being taxed some other way, so tax is worked out on your pay plus a set amount. K475 adds about £4,750 to your taxable pay.
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What does a K code mean?
Most tax codes give you tax-free pay. A K code does the opposite: it adds income to your pay before tax is worked out. It usually happens when you have untaxed income, such as a company car or private medical insurance paid by your employer, a small amount of untaxed interest, or an underpayment from a previous year being collected.
Multiply the number by 10 and add up to 9 to get the amount added: K475 adds about £4,750 a year. HMRC limits the tax taken so that it cannot be more than half of your pay in a pay period.
How a K code changes your tax
With K475 on a £30,000 salary, tax is calculated on £34,750. The extra £4,750 is taxed at 20%, which adds about £950 a year.
| Salary | Taxable pay with K475 | Income tax a year |
|---|---|---|
| £20,000 | £24,750 | £4,950 |
| £25,000 | £29,750 | £5,950 |
| £30,000 | £34,750 | £6,950 |
| £40,000 | £44,750 | £10,360 |
| £50,000 | £54,750 | £14,360 |
| £60,000 | £64,750 | £18,360 |
| £80,000 | £84,750 | £26,360 |
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What to do
- Check what is being added: look at the benefits and income listed in your tax code notice.
- If the K code is wrong, tell HMRC with the correct details.
- If you owe tax from a previous year, it may be collected through a K code.
Sources and further reading
Questions people ask
What is a K tax code?
A K code adds income to your pay before tax is worked out, because you have untaxed income or benefits.
Results are estimates for information only, not financial advice. Read the full disclaimer.
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