How do I check if my employer is paying my tax correctly?

This guide explains how to check if your employer is paying your tax correctly through PAYE. It covers tax codes, payslip checks, National Insurance, student loan deductions and how to fix errors with HMRC.

Most people in the UK trust their employer to handle PAYE correctly, yet mistakes happen far more often than many realise. Wrong tax codes, incorrect deductions, missing student loan repayments, or overpaid National Insurance can all go unnoticed for months. In my opinion every employee should check their payslip regularly because HMRC ultimately holds the taxpayer responsible even if the employer made the mistake.

This guide explains how you can check if your employer is paying your tax correctly, what each part of the payslip means, the common errors I see, and what to do if something looks wrong. By the end you will feel confident reviewing your own pay instead of wondering whether your employer or payroll team have processed everything properly.

Understanding how PAYE works

PAYE stands for Pay As You Earn. It is the system employers use to collect:

  • Income tax

  • National Insurance

  • Student loan repayments

  • Pension contributions

  • Payroll giving

  • Some court orders

Your employer calculates the deductions before paying your wages and sends the tax and National Insurance directly to HMRC.

Key point

HMRC decides your tax code and sends it to your employer. Your employer uses that code to calculate tax.

In my opinion many people believe their employer decides their tax code, but that is not the case. Any incorrect tax code usually needs correcting with HMRC, not payroll.

How to check if your employer is paying the right amount of tax

Below are the steps I recommend for checking your tax deductions every month.

Step 1: Check your tax code

Your tax code determines how much tax you pay. A single wrong digit can change your take home pay significantly.

Where to find it

Your tax code appears on your payslip next to “Tax Code” or “Code”.

Common tax codes

  • 1257L: Standard tax code for most people

  • BR: Basic rate tax applied to all income

  • 0T: No personal allowance applied

  • D0: Higher rate tax only

  • D1: Additional rate tax only

  • K codes: You owe tax through your code

How to check if your tax code is correct

Sign into your HMRC Personal Tax Account and check what code HMRC believes you are on.

If your payslip shows a different code, something is wrong.

In my opinion

Most tax problems come from incorrect codes. Always start here.

Step 2: Check your taxable pay year to date

Payslips show “Taxable Pay This Period” and “Taxable Pay Year To Date”. Compare this with your expected earnings.

Why it matters

Your tax is based on cumulative income. If your taxable pay is too high or too low, your tax will be wrong.

Example

If you earn £2,000 a month, after six months your taxable pay should be around £12,000. If the payslip says £17,000 or £8,000, your employer is not reporting your income correctly.

Step 3: Check your tax paid year to date

On your payslip you will see:

  • Tax this period

  • Tax year to date (YTD)

Compare this to HMRC’s own record through your Personal Tax Account.

If HMRC’s record does not match your payslips, your employer may not be submitting correct Real Time Information (RTI) returns.

Step 4: Check National Insurance deductions

National Insurance (NI) is calculated differently from income tax. It is based on each pay period, not cumulative income.

What to check

  • NI category (e.g. A, C, H, M)

  • NI this period

  • NI year to date

Common mistakes

  • Wrong NI category (e.g. being charged full NI when under 21 or in an apprenticeship)

  • NI deducted on pension contributions that should be NI free

  • NI deducted incorrectly on bonuses

In my opinion NI mistakes happen less often than tax code errors, but when they do occur they can cost you hundreds of pounds.

Step 5: Check student loan deductions

Many payslips show student loan deductions even when earnings are below the threshold. This is a common payroll error.

Things to check

  • Is the correct plan type being used? (Plan 1, Plan 2, Plan 4 or Plan 5)

  • Is your income above the repayment threshold?

  • Are postgraduate loan deductions correct?

Example

If you have Plan 2 and earn £24,000, no student loan repayment should be deducted.

If payroll is still deducting it, something is wrong.

Step 6: Check pension contributions

Pension deductions are usually calculated correctly, but mistakes happen when:

  • You opt out

  • You opt in late

  • Your contribution rate changes

  • The employer uses a percentage that does not match your pension scheme

  • Salary sacrifice is misapplied

Check your pension contribution percentage on the payslip against your contract or pension paperwork.

Step 7: Check any court orders or attachment of earnings

If you have a court order, child maintenance order or other deduction, ensure:

  • The right percentage is applied

  • It ends on the correct date

  • It is not duplicated

Payroll errors with court orders are rare but serious.

Step 8: Check your P45 or P60

A wrong figure on your P45 or P60 affects your entire tax calculation for the year.

P45

Issued when you leave a job. Ensure the taxable pay and tax paid figures match your payslips.

P60

Issued every April. Check all income, tax and NI amounts carefully.

If either document is wrong, HMRC may think you owe tax you do not owe or that you have underpaid.

How HMRC helps you check your tax

You can check all your PAYE history online through your HMRC Personal Tax Account.

This shows:

  • Tax codes

  • Income reported by your employer

  • Tax paid

  • Employment history

  • Benefits and expenses

  • Student loan status

In my opinion this tool is essential. It lets you see exactly what HMRC thinks your employer is paying.

Common payroll mistakes employers make

I have seen many payroll errors, especially in smaller companies without a dedicated payroll department. Common mistakes include:

Wrong tax codes

Often caused by missing starter forms or payroll using emergency codes.

Incorrect NI category

Especially with under 21s, apprentices or people returning from maternity leave.

Missing or duplicated student loan deductions

Usually caused by employers guessing the student loan plan type.

Incorrect pension enrolment

Opt out not processed or wrong contribution rate applied.

Not applying tax free allowances properly

This results in unnecessary overpayments.

Missing RTI submissions

This causes discrepancies between payslips and HMRC’s records.

Wrong starting date or leaving date

Can throw off cumulative tax calculations.

Bonus taxed incorrectly

Especially with irregular payments.

In my opinion payroll is accurate most of the time, but even the best systems make mistakes.

How to fix a problem if something looks wrong

If you believe something is wrong you should act quickly. The longer you wait the harder it is to correct.

Step 1: Speak to your employer or payroll team

Many issues are simple admin mistakes.

Step 2: Compare figures with HMRC

Use your Personal Tax Account to check what HMRC has recorded.

Step 3: Call HMRC if your tax code is wrong

Only HMRC can change your tax code. Payroll cannot fix this without HMRC issuing an update.

Step 4: Keep copies of payslips

Always keep PDF copies or photographs of your payslips. They are essential evidence if there is a dispute.

Step 5: Request a refund if you have overpaid

HMRC or your employer may issue refunds depending on the type of error.

What if your employer is not paying your deducted tax to HMRC?

This is rare but serious. Your employer must pay tax to HMRC on your behalf. If they deduct it from your wages but fail to send it to HMRC, HMRC will pursue the employer, not you.

However HMRC may contact you to verify details.

Signs this may be happening

  • HMRC says it has not received deductions

  • Your online tax account does not match your payslip

  • Your employer has financial difficulties

In my opinion this situation needs urgent attention. Contact HMRC and provide copies of your payslips.

What if your employer is using emergency tax?

If payroll does not have the correct information when you start a job, they may put you on an emergency tax code temporarily. This code often causes higher deductions.

To fix this:

  1. Complete a starter checklist or give your P45

  2. HMRC will issue a corrected tax code

  3. Payroll will adjust future payslips

  4. You will receive a refund automatically through PAYE

How to prevent issues in the future

Always submit starter paperwork on time

Missing P45s or incomplete starter forms are a major cause of tax problems.

Check your payslip every month

Do not assume payroll is correct.

Log into your Personal Tax Account a few times a year

Many problems are caught early this way.

Keep documents

P45, P60 and payslips are essential.

Update HMRC when your circumstances change

Wrong addresses, benefits or second jobs can affect your tax code.

In my opinion most employees could avoid tax problems simply by checking payslips monthly.

Final thoughts

You can absolutely check whether your employer is paying your tax correctly, and you should. PAYE works well most of the time but mistakes happen more often than people think. By checking your tax code, comparing taxable pay, reviewing deductions and confirming HMRC’s records, you can spot errors early and fix them before they snowball.

In my opinion every employee, whether in a small business or a large organisation, should treat payslip checking as a basic financial habit. Five minutes a month can save you hours of hassle later.