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Your employee's tax code tells us how much income tax is payable on their salary.

The code is worked out by HM Revenue and Customs (HMRC) and is made up of numbers and usually one letter.

Your employee's tax code will change each tax year (6 April to 5 April the following year), usually because the personal tax-free allowance is increased. The code can also change for other reasons, for example if they take on a second job.

If your employee receives income from more than one employer or also receives a pension, each will source of income will usually use a different tax code.

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