Employees on the wrong tax code
Sometimes when your employee fills in the Tax code declaration (IR330). they choose the wrong tax code.
We regularly check the details on your Employer monthly schedule (IR 348) (EMS) to make sure that your employees are on the right tax code so that we deduct the correct amount of tax and/or student loan repayments from their salary or wages.
What we do
When we identify employees using the wrong tax and/or student loan repayment code, we'll write to you, asking you to change the relevant code(s). We'll tell you which employees are using incorrect tax codes and let you know what code they should be on.
What you need to do
To make sure
employees start paying the correct amount of tax or student loan repayments as quickly as possible, you'll need to change their tax code to the correct code starting the next pay period.
When you receive a letter from us, you need to:
- change the employee's tax code to the code indicated in our letter
- deduct tax based on the new tax code.
If you're changing an employee's tax code half way through the month, please do not use two lines for the one employee on the EMS. Instead, add the total gross earnings and add the total PAYE for that month and use the new tax code.
Example - Changing an employee's tax code halfway through the month