Starting Your First Job? Here’s What Every New UK Taxpayer Needs to Know in 2026
Landing your first job is exciting, but it also means joining the UK’s PAYE (Pay As You Earn) tax system.
If you’re a first-time taxpayer in 2026, understanding how income tax works could save you from overpaying and help you keep more of your hard-earned money.
Many new workers end up on emergency tax codes without realising it, which often leads to paying more tax than necessary.
This guide walks you through everything from decoding your payslip to spotting problems early and getting money back if you’ve overpaid.
How PAYE Works When You Start Your First Job
When you begin employment in the UK, your employer deducts income tax and National Insurance directly from your wages before paying you. This system is called Pay As You Earn or PAYE for short.
Your employer uses a tax code issued by HMRC to calculate how much tax to take. The tax code tells them how much of your income is tax-free based on your Personal Allowance.
For most people starting their first job, the process works smoothly. However, if HMRC doesn’t have the right information about you, things can go wrong—and you might end up paying too much.
Your Personal Allowance in 2025/26
The Personal Tax Allowance is the amount you can earn before paying any income tax. For the 2025/26 tax year (6 April 2025 to 5 April 2026), this is set at £12,570.
If your total earnings stay below this threshold, you typically won’t owe any income tax. Earnings above £12,570 are taxed at 20% (the basic rate) up to £50,270.
Decoding Your First Payslip: What Each Deduction Means
Your payslip contains crucial information about your tax position. Here’s what to look for:
• Gross Pay – Your total earnings before any deductions
• Tax Code – The code determining your tax-free allowance (standard is 1257L)
• Income Tax – Tax deducted based on your earnings and tax code
• National Insurance – Contributions towards State Pension and benefits
• Net Pay – Your take-home pay after all deductions
Tip: Keep your payslips safe. You may need them if you ever need to check your tax position or make a rebate claim.
The Starter Checklist: Getting It Right From Day One
When you start a new job without a P45 from a previous employer, you’ll complete a Starter Checklist (previously called a P46).
This form helps your employer determine which tax code to use initially.
You’ll choose one of three statements:
• Statement A: This is your first job since 6 April and you haven’t received taxable benefits, pension, or Jobseeker’s Allowance
• Statement B: This is your only job, but you’ve had another job or received taxable benefits since 6 April
• Statement C: You have another job or receive a State/Occupational Pension
For most first-time workers straight from education, Statement A is typically the correct choice. Selecting the wrong statement could result in an incorrect tax code.
Why Emergency Tax Codes Happen (And What to Do)
One of the most common reasons new workers overpay tax is being placed on an emergency tax code.
This happens when HMRC lacks sufficient information to issue your correct code.
Common Emergency Tax Codes to Watch For
• 1257L W1 or M1 – Tax calculated weekly/monthly without your full annual allowance
• BR – All income taxed at 20% with no Personal Allowance applied
• 0T – No Personal Allowance given; all earnings taxed
If you spot any of these on your payslip, you may be overpaying.
How to Get Your Correct Tax Code
• Ensure you’ve completed the Starter Checklist accurately
• Set up your HMRC Personal Tax Account at GOV.UK
• Contact HMRC to update your employment details
• Check your payslip after a few weeks to confirm the code has changed
Once corrected, any overpaid tax should typically be refunded through your wages.
In some cases, you might receive a larger-than-usual pay packet when the adjustment comes through.
Five Common Tax Mistakes New Workers Make
1. Not Providing a P45
If you had any previous employment—even part-time work during school or university—you should have received a P45 when you left. Providing this to your new employer helps ensure a smooth tax code transition.
2. Ignoring Your Tax Code
Your tax code appears on every payslip. If it doesn’t show 1257L (the standard 2025/26 code), investigate why. A wrong code could mean you’re overpaying.
3. Working Multiple Jobs Without Telling HMRC
If you have more than one job, your Personal Allowance can only apply to one of them. Your second job is usually taxed using a BR code. Make sure HMRC knows about all your employment.
4. Missing Out on Work Expense Claims
Even new employees may be entitled to tax relief on certain expenses. If you wear a uniform and wash it yourself, or pay professional subscription fees, you could potentially claim money back.
5. Not Setting Up a Personal Tax Account
Your HMRC Personal Tax Account lets you check your tax code, view your estimated tax for the year, and claim refunds. Setting this up early could save you hassle later.
Work Expenses You Could Claim
Many first-time workers don’t realise they may be able to claim tax relief on work-related expenses from day one:
• Uniform washing – Flat rate allowance (varies by industry)
• Professional fees – HMRC-approved body memberships required for your job
• Tools & equipment – Items you buy for work that aren’t reimbursed
• Business mileage – 45p per mile for work travel (not commuting)
You can potentially backdate claims for the last four tax years, so even if you’ve been working without claiming, it may not be too late.
Student Loan Repayments: What to Expect
If you have a student loan, repayments are automatically deducted once you earn above the threshold.
The amount depends on your plan type:
• Plan 1 – £24,990 annual threshold, 9% repayment rate above threshold
• Plan 2 – £27,295 annual threshold, 9% repayment rate above threshold
• Plan 4 (Scotland) – £31,395 annual threshold, 9% repayment rate above threshold
• Plan 5 – £25,000 annual threshold, 9% repayment rate above threshold
• Postgraduate – £21,000 annual threshold, 6% repayment rate above threshold
Note: Thresholds may change. Check GOV.UK for current figures.
How to Claim Back Overpaid Tax
If you’ve overpaid due to an emergency code or unclaimed expenses, you have several options:
• Personal Tax Account – Check online if you’re owed a refund
• P800 from HMRC – HMRC may send this automatically if they calculate you’ve overpaid
• P87 Form – Claim tax relief on employment expenses
• Contact HMRC – Call or write if you need assistance
You can generally claim tax back for the previous four tax years.
Key Takeaways
• Your tax code determines how much tax you pay—check it’s 1257L for 2025/26
• Complete the Starter Checklist carefully to avoid emergency tax codes
• Emergency codes like BR, 0T, or those ending in W1/M1 often mean overpayment
• Set up your HMRC Personal Tax Account early
• You may be able to claim tax relief on uniforms, tools, and professional fees
• Keep all payslips and tax documents safe
• You can potentially claim refunds for the last four tax years
Frequently Asked Questions
How much can I earn before paying tax in my first job UK?
For the 2025/26 tax year, you can typically earn up to £12,570 before paying income tax. This is called your Personal Allowance. If your total earnings stay below this amount, you generally won’t owe any income tax.
Why am I on an emergency tax code in my first job?
Emergency tax codes happen when HMRC doesn’t have enough information about you. This often occurs if you haven’t completed a Starter Checklist correctly or if your employer hasn’t received your details. Common emergency codes include BR, 0T, or codes ending in W1 or M1.
What tax code should I have in my first job 2025/26?
Most first-time workers should have the tax code 1257L for the 2025/26 tax year. This code gives you the standard Personal Allowance of £12,570. If your payslip shows a different code, you may want to check with HMRC.
Can I claim a tax rebate in my first year of work?
Yes, you may be able to claim a tax rebate if you’ve overpaid due to an emergency tax code or if you have work expenses like uniform washing costs or professional subscription fees. You can claim through your HMRC Personal Tax Account or by submitting a P87 form.
What is a Starter Checklist and which statement should I choose?
A Starter Checklist is a form you complete when starting a job without a P45. For most first-time workers straight from education, Statement A is typically correct: ‘This is my first job since 6 April and I’ve not received any taxable benefits.’ Choosing the wrong statement could result in paying too much or too little tax.
What to Do Next
If you’re starting your first job or think you might have overpaid tax, use our free Tax Rebate Calculator to estimate what you could be owed.
You can also check your tax code is correct using our Tax Code Checker.
Understanding your tax position from day one could help you avoid common pitfalls and ensure you’re not leaving money with HMRC that belongs in your pocket.
