Last updated: 14 October 2026
What tax code should you use for a new employee with no P45?
If a new employee doesn’t have a P45, ask them to complete HMRC’s starter checklist. Their answer to the “employee statement” decides the code. Statement A (first job since 6 April) gives 1257L cumulative. Statement B (only job now, but has had another job or benefits since 6 April) gives 1257L W1/M1. Statement C (has another job or a pension) gives BR. If you have neither a P45 nor a completed checklist, use 0T on a non-cumulative (W1/M1) basis.
Tax codes from the starter checklist (2026/27)
| Employee statement | Situation | Tax code |
| A | First job since 6 April, no taxable benefits or pension | 1257L (cumulative) |
| B | Now the only job, but has had another job or taxable benefits since 6 April | 1257L W1/M1 |
| C | Has another job or a pension | BR |
| No information | No P45 and no checklist | 0T W1/M1 |
What W1/M1 means
“Week 1/Month 1” (non-cumulative) means tax is worked out on each payday’s pay alone, without year-to-date figures. That prevents large refunds or underpayments until HMRC sends you the correct code.
Why 0T matters
0T gives no Personal Allowance, so all of the pay is taxed at 20%, 40% or 45%. It is a temporary code, and HMRC will usually issue a better one once you file the Full Payment Submission. Tell the employee why their first payslip may show more tax.
Steps for a new starter
- Ask for their P45, parts 2 and 3. If they have one, use the code and year-to-date figures it shows
2. If there is no P45, give them the starter checklist
3. Record their National Insurance number, date of birth and address
4. Add them to payroll with the correct code and starter declaration
5. Include the starter information on your first FPS for them
6. Assess them for pension auto-enrolment
Student and postgraduate loans
The checklist also asks about student loans. Add the right plan type (Plan 1, 2, 4 or 5, or Postgraduate) so deductions start on time.
When HMRC sends a new code
Use the code on the P6 or P9 notice from your next payday. HMRC also sends codes to your payroll software through its data service.
Explaining the first payslip
New starters often worry when their first payslip shows more tax than they expected. Explain that an emergency code is temporary and that HMRC will usually send a corrected code within a few weeks. Any overpaid tax is normally refunded through payroll once the right cumulative code is in place, or after the end of the tax year. Encourage the employee to check their personal tax account and to give HMRC details of any other job or pension.
Frequently asked questions
Can I just use 1257L for everyone?
No. Using the wrong code can leave the employee owing tax, and HMRC may ask you to correct it.
The employee’s P45 is very old. Can I use it?
Only a P45 for the current tax year can be used. If it is from a previous tax year, use the starter checklist.
What about directors?
Directors’ NIC is calculated on an annual basis, but the tax code rules are the same.
Does the checklist go to HMRC?
No. Keep it with your payroll records for 3 years.
Related: PAYE registration and payroll setup and small business payroll.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with setting up new starters in payroll. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
