Check what a tax code means
Every UK tax code explained, with exact tax-free pay for each pay schedule.
The BR tax code tells an employer to deduct income tax at the basic rate of 20% on every pound paid, with no Personal Allowance at all, against a standard allowance of £12,570 that most employees would otherwise receive in the 2026-27 tax year [1] [5]. HMRC usually issues it for a second job or a second pension, where the allowance is already being used elsewhere [2].
For the employee, BR is often the code that appears on the payslip from a weekend job, a part-time evening role or a workplace pension taken alongside a salary. For the employer, it is one of the simplest codes to operate, yet it generates a steady stream of queries: why is tax being taken from such a small wage, why does the figure never change, and why did a refund or a bill arrive after the end of the tax year?
The answer lies in how PAYE spreads a single Personal Allowance across several sources of income. BR is correct when the allowance is fully used by another job and the combined income stays within the basic rate band. Outside that narrow position, BR overtaxes or undertaxes, and the difference is settled later.
This article explains what BR means, when HMRC and employers use it, how payroll calculates it, how it behaves in Scotland and Wales, the over and underpayment scenarios with worked figures, and the checks an employer should run when a BR code lands on a payroll record.
Key takeaways
- BR means all income from that job or pension is taxed at the basic rate of 20%, with no tax-free Personal Allowance [1] [2].
- HMRC typically issues BR for a second job or pension, because the £12,570 allowance is allocated against the main source of income [8] [5].
- An employer must use BR for a new starter who ticks Statement C on the starter checklist, confirming another job or a pension [4].
- As a rule, BR is operated on the cumulative basis, with Scottish (SBR) and Welsh (CBR) equivalents [3].
- BR affects income tax only; National Insurance is calculated separately for each job using its own thresholds [12] [11].
What the BR tax code means
A tax code is HMRC's instruction to an employer or pension provider about how much tax-free pay to give and which rates to apply [13]. Most codes combine a number, representing the tax-free allowance, with a letter. BR is different: it has no number because it carries no allowance at all [1].
HMRC's employer guidance describes BR as tax "from all income at the basic rate", usually used for a second job or pension [2]. The letters stand for "basic rate", and the instruction is mechanical: whatever the employee earns in that employment, 20% comes off as income tax [5].
BR compared with other flat-rate codes
BR belongs to a small family of codes that apply a single rate to all pay. The table below sets out the flat-rate codes in use in England and Northern Ireland and what each one instructs [1] [2].
| Code | Instruction to payroll | Typical use |
|---|---|---|
| BR | Tax all pay at 20% | Second job or pension within the basic rate band |
| D0 | Tax all pay at 40% | Second job where the main job uses up the basic rate band |
| D1 | Tax all pay at 45% | Second job where income exceeds the additional rate threshold |
| 0T | Tax all pay using the bands, no allowance | New starter with no information, or allowance used up |
| NT | No tax deducted | Narrow cases specified by HMRC |
The difference between BR and 0T is often misunderstood. Both give no Personal Allowance, but 0T runs the pay through the normal bands, so higher rates can apply once pay passes the basic rate threshold, while BR charges 20% regardless of how much is paid [8] [2].
BR is not an emergency code
BR is a deliberate code reflecting the employee's overall position, not a placeholder. HMRC lists the emergency codes separately as those ending in W1, M1 or X, or marked NONCUM, which apply a Week 1 or Month 1 basis while HMRC waits for information [1] [14]. The two can combine, for example BR M1, but the BR element itself is a statement that the allowance is used elsewhere. The guide to emergency tax codes covers the Week 1 and Month 1 basis in detail.
When BR is used
BR appears on a payroll record in three main ways: HMRC issues it after reviewing the employee's sources of income, the employer applies it from the starter checklist, or it results from a change in the employee's circumstances during the year.
Second jobs and second pensions
The most common reason is a second employment. Each person has one Personal Allowance, £12,570 for the 2026-27 tax year, and HMRC allocates it against the main job or pension [5] [8]. The main employer receives a code such as 1257L, explained in the guide to tax code 1257L, and the second employer receives BR so that every pound of the second income is taxed [1].
The same logic applies to pensions. A person who draws a workplace pension and continues working, or who holds two pensions, typically has the allowance set against the larger income and BR against the other [8] [1]. For businesses that take on occasional or part-time staff, an SME payroll platform that stores the code basis alongside each employment avoids applying the wrong allowance to a second job.
Statement C on the starter checklist
When a new employee arrives without a P45, the employer uses HMRC's starter checklist to choose a code. The checklist offers three statements, and each dictates a different code [4].
| Starter checklist statement | What the employee confirms | Code the employer uses |
|---|---|---|
| Statement A | First job since 6 April, no other taxable income | Current Personal Allowance code (1257L) |
| Statement B | Had another job since 6 April but no P45 | 1257L on a Week 1 or Month 1 basis |
| Statement C | Has another job or receives a pension | BR |
| No statement given | Insufficient information | 0T on a Week 1 or Month 1 basis |
Statement C reads: "I have another job and/or I am in receipt of a State, workplace or private pension", and the employer guidance for that statement is simply to use tax code BR [4]. Where no information is provided at all, 0T is the default, which can be harsher than BR for higher earners [2].
Changes during the tax year
HMRC can move an employee onto BR mid-year, for example when a new main job starts and the allowance moves with it, or when a pension starts and becomes the larger source of income [13]. The employer is notified electronically and must apply the new code from the next payroll run [13].
A mid-year switch from 1257L to BR on a cumulative basis would claw back all the allowance given earlier in the year in a single period. HMRC's PAYE Manual recognises this and notes that, where a code is reduced to BR, it may be necessary to tell the employer to apply it on a Week 1 or Month 1 basis instead [3]. Payroll teams should always check the basis shown on the coding notice.
How payroll calculates tax under BR
The calculation under BR is the simplest in PAYE. HMRC's specification for PAYE tax table routines, the technical document payroll software must follow, treats the whole of the cumulative pay to date as taxable, because there is no free pay to deduct [17].
The cumulative routine step by step
Under the specification, the routine adds the current period's pay to pay to date, rounds the taxable pay down to the nearest pound, taxes the whole of it at the basic rate, and deducts the tax already paid to arrive at the figure for the period [17]. HMRC's PAYE Manual confirms that "as a rule, BR is operated on the cumulative basis" [3].
The cumulative basis matters because it self-corrects. If an employee was previously on a code with an allowance and moves to BR, or the reverse, the cumulative calculation adjusts the tax across the year rather than period by period [3]. On a Week 1 or Month 1 basis, each payment is taxed in isolation with no look-back, so no refund or catch-up flows through [3] [14]. The specification also requires flat-rate codes such as BR to run on a non-cumulative basis in a Week 53, 54 or 56 payment [17].
A worked monthly example
The table below shows an employee earning £800 a month in a second job, on BR on the cumulative basis, compared with the same pay on 1257L as a sole job, using the 2026-27 rates [5] [12].
| Monthly figure | Code BR (second job) | Code 1257L (only job) |
|---|---|---|
| Gross pay | £800.00 | £800.00 |
| Tax-free pay for the month | £0.00 | £1,047.50 |
| Taxable pay | £800 | £0 |
| Income tax at 20% | £160.00 | £0.00 |
| Employee NI (below £1,048 Primary Threshold) | £0.00 | £0.00 |
| Employer NI (15% above £417) | £57.45 | £57.45 |
The income tax figure is the only one that changes between the two codes. National Insurance is unaffected by the tax code, because it works from its own thresholds per employment [12]. Over a full year the BR employee pays £1,920 in tax on £9,600 of pay, which is correct only if the allowance has been fully used by another income [5].
BR in Scotland and Wales
Income tax is partly devolved, so BR has a Scottish and a Welsh version. HMRC lists SBR as taxing all income at the Scottish basic rate and CBR as taxing all income at the Welsh basic rate [1] [3].
The flat-rate codes across the three jurisdictions
The table below maps each flat-rate code to its Scottish and Welsh equivalents and the rate it applies in the 2026-27 tax year [1] [6] [7].
| England and Northern Ireland | Scotland | Wales | Rate applied |
|---|---|---|---|
| BR (20%) | SBR (basic, 20%) | CBR (20%) | Basic rate |
| D0 (40%) | SD0 (intermediate, 21%) | CD0 (40%) | Next band up |
| D1 (45%) | SD1 (higher, 42%) | CD1 (45%) | Second band up |
| None | SD2 (advanced, 45%) | None | Scotland only |
| None | SD3 (top, 48%) | None | Scotland only |
One detail catches Scottish payroll teams out. Scotland has a starter rate of 19% on taxable income between £12,571 and £16,537, but SBR applies the Scottish basic rate of 20%, not the starter rate [6] [17]. A Scottish taxpayer with a small second job therefore pays 20% on that income, even though some of their total income may ultimately be taxed at 19%.
Why the prefix matters to payroll
The prefix is what tells the software which rate table to use. Under the HMRC specification, if no S or C identifier appears, the whole of the pay is taxed at the UK basic rate, with the Scottish and Welsh rates applied only when the prefix is present [17] [1]. Accountants running schemes with staff on both sides of the border rely on a multi-client payroll dashboard that reads the prefix per employee rather than assuming a default jurisdiction.
When BR overtaxes and when it undertaxes
BR is a simplification. It assumes that the allowance is fully used by the main income and that the combined income stays within the basic rate band. When either assumption fails, the tax deducted across all jobs will be wrong, and HMRC settles the difference after the tax year [10].
Overpayment: two low-paid jobs
Consider an employee with two part-time jobs paying £10,000 and £8,000 a year. Job A holds 1257L and Job B holds BR. Job A uses only £10,000 of the £12,570 allowance, so £2,570 is wasted, while Job B taxes the full £8,000 at 20% [5] [8].
| Scenario | Tax on Job A | Tax on Job B | Total tax |
|---|---|---|---|
| 1257L on Job A, BR on Job B | £0 | £1,600 | £1,600 |
| Correct liability on £18,000 | £1,086 | ||
| Split allowance (1000L and 257L) | £0 | £1,086 | £1,086 |
The BR arrangement overcollects £514 across the year. Where neither job uses the whole allowance, HMRC can split it between the jobs on request, which prevents the overpayment during the year [8]. Without a split, HMRC refunds the excess after the year ends through a P800 tax calculation [10].
Underpayment: a second job that crosses the higher rate threshold
The opposite problem arises at higher incomes. An employee earning £45,000 in a main job on 1257L and £10,000 in a second job on BR has total income of £55,000, which is £4,730 above the £50,270 higher rate threshold [5]. BR taxes that slice at 20% rather than 40%, so £946 is undercollected over the year [5] [8].
HMRC prevents this, where it has the information, by issuing D0 instead of BR to the second employer, so that the second job is taxed at 40% [8]. Where it does not, the shortfall is usually collected through a future tax code or, for larger amounts, a Simple Assessment, for which HMRC uses a threshold of £3,000 [10]. Employees who also file returns should read the guide to PAYE and self-assessment, since a return adjusts the position automatically.
How the year-end reconciliation works
HMRC reconciles each employee's PAYE record after the tax year ends. Letters showing an overpayment or underpayment are sent between June and March of the following tax year, either as a P800 or a Simple Assessment [10]. Being "put on the wrong tax code" is one of the triggers HMRC lists for a P800 [10]. The PAYE Manual adds that no potential underpayment is calculated or notified when a code is reduced to BR, so HMRC staff consider whether to alert the employee before the year-end calculation [3].
What employers should check when BR appears
For an employer, a BR code is an instruction to follow, not to question. Only HMRC can change a code, and the employer must apply whatever HMRC sends from the effective date shown [13]. There are still a few checks worth building into the payroll routine.
A practical checklist
The table below summarises the checks that prevent most BR-related errors [3] [4] [13].
| Check | Why it matters |
|---|---|
| Starter checklist statement recorded | Statement C requires BR; no statement requires 0T Week 1 or Month 1 |
| Basis on the coding notice | A BR code may be cumulative or Week 1 or Month 1 |
| Nation prefix | SBR and CBR use devolved rate tables |
| Code change effective date | Apply from the next payroll run after notification |
| Employee queries | Direct the employee to HMRC; the employer cannot alter the code |
Employees can check the code HMRC holds and the income used to build it through their personal tax account, which is the quickest way to establish whether BR reflects their real position [15]. Employers issuing occasional payslips to staff on BR can use an instant payslip generator that shows the code and basis clearly, which reduces queries.
Leavers and payments after leaving
BR is sometimes confused with the code used for payments made after an employee has left. GOV.UK instructs employers to use 0T on a Week 1 or Month 1 basis for any payment made after the P45 has been issued, with S0T and C0T for Scottish and Welsh taxpayers [9]. That rule applies whatever code the employee held while employed, including BR, and the payment must be reported on the next FPS with the original leaving date [9].
National Insurance is unaffected by BR
Tax codes govern income tax only. Class 1 National Insurance is calculated separately in each employment using the weekly or monthly thresholds, so a second job paying under £1,048 a month attracts no employee contributions even when it carries BR [12]. Employers still pay 15% above the £417 monthly Secondary Threshold on that job [12]. Employees with more than one job who pay contributions in each can apply to defer some of them, which GOV.UK lists as a reason a person may pay less [11].
Software that holds the HMRC Recognised status applies BR, SBR and CBR correctly on both bases and reports the code with every Full Payment Submission. Platforms that embed UK payroll through an HMRC-recognised payroll API receive the same tax-code logic as part of the engine, so a second-job employee is handled correctly without manual configuration [17].
Check any tax code in seconds
A BR code is easy to recognise but easy to misread alongside its Scottish, Welsh and Week 1 variants. The Moonworkers tax code checker decodes any code, including BR, SBR and CBR, and shows how it will be applied to pay.
On your payslip, P45 or P60. Suffixes W1, M1 or X welcome.
What you'll get
Enter any UK tax code to see:
- · what each letter and number means
- · which nation's rates apply (S and C prefixes)
- · cumulative vs emergency W1/M1/X basis
- · the exact tax-free pay for every pay schedule, to the penny
Try 1257L, a K code, or an emergency W1 code.
Payroll that applies every tax code correctly
Moonworkers runs the full HMRC exact percentage method on every payslip, including K codes, emergency codes and in-year code changes, and files RTI automatically.
Conclusion
BR is the tax code that makes PAYE work for people with more than one income. By giving the whole Personal Allowance to one employment and taxing the other at a flat 20%, HMRC keeps deductions broadly right without every employer needing to know about every other job. The price of that simplicity is accuracy at the edges: two low-paid jobs overpay, and a second job pushing total income into the higher rate band underpays.
As HMRC's data on multiple employments becomes more joined up through Real Time Information, the trend is towards more tailored codes, such as split allowances and D0 codes, applied earlier in the year. For employers, the task remains the same: apply exactly the code and basis HMRC issues, record the starter checklist correctly, and leave the reconciliation to the system built for it.
Frequently asked questions
Why is tax being taken from a small second job on BR?
BR gives no Personal Allowance, so every pound of pay in that job is taxed at 20%, however small the wage [1]. The allowance is being used against the main job or pension instead. If the main job does not use the whole £12,570, the employee can ask HMRC to split the allowance between the jobs [8].
Is BR an emergency tax code?
No. BR reflects HMRC's view that the allowance is used elsewhere, whereas emergency codes are marked W1, M1, X or NONCUM and apply a Week 1 or Month 1 basis while information is missing [1]. A BR code can be combined with a Week 1 or Month 1 basis, but that is a separate instruction on the coding notice [3].
What is the difference between BR and 0T?
Both codes give no Personal Allowance. BR taxes all pay at 20% regardless of the amount, while 0T runs pay through the normal tax bands, so 40% and 45% apply once pay passes the relevant thresholds [8] [2]. Employers use BR for Statement C on the starter checklist and 0T when no information is provided.
How is overpaid tax on a BR code refunded?
If the cumulative basis applies, a later code change can produce a refund through payroll during the year [3]. Otherwise HMRC reconciles the position after the tax year ends and sends a P800 tax calculation between June and March of the following year, explaining how to claim the refund [10].
