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Income tax, National Insurance and net pay for any UK salary, 2026-27.
Local authorities in England collected £41.2 billion in council tax in the 2024 to 2025 year, yet £6.6 billion of council tax remained outstanding at 31 March 2025, an increase of 11.0% on the previous year [1]. To recover part of that arrears figure, a billing authority can order an employer to deduct unpaid council tax straight from a debtor's wages, using a council tax attachment of earnings order made under the Council Tax (Administration and Enforcement) Regulations 1992 [2]. The order lands on the employer, not the debtor, and carries legal duties backed by a fine of up to £1,000 for getting it wrong [2].
A council tax attachment of earnings order, sometimes shortened to CTAEO, is not the same as a court attachment of earnings order for a civil debt, and it is not the same as a benefit-debt Direct Earnings Attachment from the Department for Work and Pensions. It has its own deduction tables, its own priority rules, and its own reporting duties, all set by the 1992 Regulations rather than by a court [2].
This article explains how a council reaches the point of issuing one, exactly how the deduction is calculated from the statutory tables, what the employer must do and by when, how two orders interact, and the penalties for non-compliance. The process described applies to billing authorities in England and Wales.
Key takeaways
- A council tax attachment of earnings order (CTAEO) makes an employer deduct unpaid council tax from an employee's pay and send it to the council.
- The deduction is a percentage of net earnings taken from statutory tables, rising to 50% of pay above the top band.
- An employer must act on the order from the first payday after receiving it and can be fined up to £1,000 for failing to comply.
- An employer can be required to run up to two council tax orders at once, applying the second to the pay left after the first.
- An employer may take a further £1 from the employee each payday towards administrative costs.
How a council reaches an attachment of earnings order
An attachment of earnings order is near the end of the council tax recovery chain, not the start of it. A council issues a reminder notice giving seven days to pay a missed instalment, and if that is not paid the whole year's council tax becomes due [3]. A debtor receives a maximum of two reminders in a financial year, after which a final notice demands the full annual balance [3].
Only once that has failed does the council apply to a magistrate for a liability order, a legal demand for payment that can add the council's legal costs to the debt [3]. The liability order is what unlocks enforcement, and the attachment of earnings order is one of the routes it opens. Understanding this sequence matters for an employer, because by the time an order arrives the debt has already been through several stages the employee will have been warned about.
What the liability order unlocks
A liability order gives the council a menu of enforcement options, and attachment of earnings is only one of them. The council can also apply to deduct from certain benefits, including Universal Credit, Employment and Support Allowance, Income Support, Jobseeker's Allowance and Pension Credit [4]. Where none of those routes works, it can instruct enforcement agents, previously called bailiffs, to seize goods, with their costs added to the debt [5].
The reason a council often prefers an attachment of earnings order is that it is predictable and low-cost: the employer does the collection, and the money arrives on a regular payroll cycle. For an employed debtor it is usually a less severe route than enforcement agents, though the debtor cannot choose it, since the council decides which method to use once it holds a liability order [4]. An employee who is struggling can still ask the council about a payment arrangement or check eligibility for Council Tax Reduction [6].
Where it sits against other pay orders
The council tax order is a creature of the 1992 Regulations, which sets it apart from a court order made under the Attachment of Earnings Act 1971 [7]. The mechanics, the tables and the duties differ, and an employer running payroll for several people may see more than one type at once. The wider picture of how each order type is worked out sits in the guide to how attachment of earnings deductions are calculated, while this article focuses on the council tax order itself.
How the council tax deduction is calculated
The deduction under a council tax attachment of earnings order is a percentage of net earnings, read from a statutory table according to how often the employee is paid [2]. Net earnings for this purpose are the earnings left after income tax, primary Class 1 National Insurance contributions and pension (superannuation) contributions have been deducted [2]. Because overtime and bonuses move net earnings, the deduction can change every pay period.
The tables below apply to orders made after 1 April 2007, and there are three of them: a weekly table, a monthly table, and a daily table for irregular pay intervals [2]. A business handling this alongside PAYE and pensions usually leans on HMRC-recognised payroll software for SMEs to apply the correct table and total the deduction automatically.
The monthly deduction table
For a monthly-paid employee, the rate runs from nil on net earnings of £300 or less up to 17% on the band between £1,420.01 and £2,020, with a marginal 50% rate on everything above £2,020 [2]. A monthly net figure of £1,000 falls in the £900.01 to £1,420 band, giving a 12% deduction of £120 [2].
| Monthly net earnings | Deduction rate |
|---|---|
| Not exceeding £300 | Nil |
| £300.01 to £550 | 3% |
| £550.01 to £740 | 5% |
| £740.01 to £900 | 7% |
| £900.01 to £1,420 | 12% |
| £1,420.01 to £2,020 | 17% |
| Over £2,020 | 17% on the first £2,020, then 50% of the remainder |
The 50% marginal band is what makes the council tax order bite hardest on higher earners. On monthly net earnings of £2,500, the deduction is 17% of £2,020, which is £343.40, plus 50% of the £480 above it, which is £240, giving a total of £583.40 for the period [2].
The weekly and daily tables
The weekly table mirrors the monthly one on a smaller scale, from nil on £75 or less up to 17% on the band between £355.01 and £505, then 50% above £505 [2]. A weekly net figure of £300 sits in the £225.01 to £355 band, so the deduction is 12%, or £36 [2].
| Weekly net earnings | Deduction rate |
|---|---|
| Not exceeding £75 | Nil |
| £75.01 to £135 | 3% |
| £135.01 to £185 | 5% |
| £185.01 to £225 | 7% |
| £225.01 to £355 | 12% |
| £355.01 to £505 | 17% |
| Over £505 | 17% on the first £505, then 50% of the remainder |
Where an employee is paid at any other regular interval, the regulations require the employer to convert pay to a notional daily figure using the daily table, then scale the result across the days in the interval [2]. The daily table starts at nil on net earnings of £11 or less and follows the same percentage steps as the weekly and monthly versions [2].
The £1 administration charge
On each payday where a deduction is made, the employer may take an additional £1 from the employee towards its own administrative costs, on top of the amount sent to the council [2]. This charge is separate from the deduction itself and does not reduce the amount owed to the council. It is a small recognition of the payroll work the order creates, and it can be taken every time a deduction is actually made.
Unlike a benefit-debt Direct Earnings Attachment, the council tax order has no explicit 60% protected-earnings floor written into its percentage tables, which is one reason the DEA on a payslip and the council tax order can produce very different take-home figures on the same pay. The council tax bands are designed so that lower earners are protected by the nil and low-percentage bands rather than by a single floor [2].
What the employer must do
An employer served with a council tax attachment of earnings order must start deducting from the first payday after receiving it and continue until the amount on the order is paid in full or the council tells the employer to stop [2]. Each deduction must reach the council promptly, and councils typically require the money by the 19th day of the month following the month of deduction [2].
The employer also carries reporting duties that run alongside the deductions. Accountants operating this across a client base usually manage the notifications and payment deadlines through a multi-client payroll dashboard rather than tracking each order by hand.
The notification duties
If an employer is served with an order for someone it does not employ, it must tell the authority within 14 days [2]. The same 14-day deadline applies when an employee who is subject to an order leaves the business, so the council knows the deduction has stopped and can pursue the debt elsewhere [2]. An employer who takes on someone already subject to an order, and who knows the order exists, must notify the relevant authority within 14 days of becoming their employer [2].
The employer must also tell the employee, in writing, the total amount deducted under the order, including any £1 charges, and this can be shown on the pay statement issued after each deduction [2]. Presenting the deduction clearly on the payslip is part of the duty, not a courtesy, and payroll systems built as an HMRC-recognised payroll engine generate the labelled deduction line and the running total automatically.
What the employer must not do
An employer has no discretion to delay, reduce or stop deductions at the employee's request, because the order is a legal instruction from the council, not a matter for negotiation between employer and employee [2]. An employee who disputes the debt must take that up with the council, not the payroll team. Deductions are made from net earnings as defined, and the regulations exclude certain payments, so an employer should not attach a payment that does not count as earnings under the rules [2].
When more than one order applies
An employer can be legally required to operate up to two council tax attachment of earnings orders for the same employee at the same time [2]. Where two orders run together, the earlier order is dealt with first, and the later order applies only to the earnings that remain after the first deduction has been made [2]. The date the order was made, not the size of the debt, sets the sequence.
Council tax orders also interact with other kinds of order. A council tax attachment of earnings order and a court order under the 1971 Act are dealt with in the order of their respective dates, and a non-priority court order for a judgment debt is not dealt with until the council tax order has been handled [2]. This sequencing is the part employers most often get wrong when running orders in a spreadsheet, because it depends on order dates and types rather than on any single running total.
| Combination | How the employer deals with it |
|---|---|
| Two council tax orders | Earlier order first; later order on the residue of earnings |
| Council tax order and 1971 Act court order | In date order of the orders |
| Council tax order and non-priority judgment debt | Council tax order dealt with before the judgment debt |
The penalties for getting it wrong
The duties attached to a council tax order are backed by a criminal penalty, which is why the order cannot be treated as optional administration. An employer that fails to comply with the order, or that gives false information, can be prosecuted and fined up to £1,000 [2]. The fine can apply each time the employer fails to make a required payment, so a persistent failure is not a single-fine risk [2].
For the debtor, the stakes are higher still if the wider recovery fails. A council can ultimately take a debtor back to the magistrates' court, which can commit them to prison for up to three months where it finds they can afford to pay and have refused to do so [3]. Against that backdrop, an attachment of earnings order that runs cleanly through payroll is usually the least disruptive outcome for everyone, provided the employer operates it correctly.
Work out the net earnings the deduction applies to
Because every council tax deduction is a percentage of net earnings rather than gross, the first practical step for any employer is to establish the correct net figure. An employer can size the underlying take-home pay with the Moonworkers UK salary calculator, which applies the current PAYE and National Insurance rules to any gross salary, and then read the resulting net figure against the relevant council tax table above.
£ per month
e.g. 1257L, S1257L, BR, D0
S = Scotland · C = Wales · W1/M1 = non-cumulative
Enter a salary or hourly rate above
About this calculator
This calculator gives you a close estimate of your UK payroll deductions for 2026-27, using HMRC's exact percentage method with periodised thresholds. It handles the three tax territories, K codes with the 50% regulatory limit and its carry-forward, weeks 53, 54 and 56, the cumulative and W1/M1/X bases, student and postgraduate loans, and pension contributions on qualifying earnings. It still won't match your payslip to the penny in every case: it does not cover in-year tax code changes, payrolled benefits in kind, NI deferral across more than one employment, directors on the annual earnings period, or employer-level annual adjustments such as the Employment Allowance and the apprenticeship levy. Powered by the same engine as the Moonworkers Payroll API.
Frequently asked questions
Why might the result differ from my payslip?
This calculator uses your current gross pay and tax code to produce an estimate. K-code carry-forwards and weeks 53, 54 and 56 are handled, and the Year-to-date section reproduces a specific period exactly. What your employer may apply that this does not: a mid-year tax code change, benefits in kind processed through payroll, or NI deferral across more than one employment. For most employees on a standard tax code the difference is negligible.
What tax code should I enter?
Use the tax code shown on your most recent payslip or the PAYE Coding Notice (P2) from HMRC. If you're not sure, 1257L is the standard code for most employees resident in England, Wales, or Northern Ireland. Use S1257L for Scotland or C1257L for Wales if you pay Scottish or Welsh income tax.
Which NI category applies to me?
Most employees use Category A. Use M if you are under 21, H if you are an apprentice under 25, or C if you are over State Pension age. Your employer is responsible for assigning the correct category — if in doubt, check your payslip.
Which student loan plan am I on?
Your plan depends on when and where you studied. Plan 1 covers students who started before September 2012. Plan 2 is for English and Welsh students who started from September 2012 to July 2023. Plan 5 applies to English students who started from August 2023. Plan 4 covers Scottish students. You can check your plan at gov.uk or on your payslip.
What is the YTD cumulative PAYE mode?
HMRC's standard method calculates income tax on your total earnings to date each period, then subtracts tax already paid. If you're mid-year and want to see exactly what tax should be deducted in a specific period, expand the Year-to-date section and enter your running totals from previous periods only.
Conclusion
A council tax attachment of earnings order turns an employer into a collection agent for a billing authority, with a statutory table, fixed reporting deadlines and a criminal penalty behind the duty. It arrives only after a debtor has passed through reminders, a final notice and a liability order, and it sits alongside benefit deductions and enforcement agents as one of the tools a liability order unlocks. The distinctive features are the deduction tables that reach 50% on pay above the top band, the two-order limit, and the strict date-order priority when orders overlap.
For a payroll team, the discipline is to apply the right table to the right net figure, meet the 14-day notification duties, present the deduction transparently on the payslip, and never accept an instruction from the employee to pause it. As councils lean harder on payroll to recover a growing arrears figure, the employers who handle these orders cleanly will be those whose payroll builds the calculation, the sequencing and the reporting into every payrun rather than treating each order as a manual exception.
Frequently asked questions
How much can a council tax attachment of earnings order take from wages?
It takes a percentage of net earnings set by statutory tables, rising from nil on low pay to 17% on the top standard band and 50% on any monthly net earnings above £2,020 or weekly net earnings above £505 [2]. Net earnings are pay after income tax, National Insurance and pension contributions. The employer may also take a further £1 each payday towards administrative costs.
Can an employer refuse to operate a council tax attachment of earnings order?
No. The order is a legal instruction under the Council Tax (Administration and Enforcement) Regulations 1992, and an employer that fails to comply or gives false information can be fined up to £1,000 [2]. The employer has no discretion to delay, reduce or stop deductions at the employee's request, and must start from the first payday after receiving the order.
What happens if an employee already has another attachment of earnings order?
An employer can be required to run up to two council tax orders at once, dealing with the earlier order first and applying the later one to the earnings left after the first deduction [2]. Where a council tax order and a court order under the 1971 Act both apply, they are dealt with in the order of their dates, and a non-priority judgment debt waits until the council tax order has been handled.
What must an employer tell the council?
An employer must notify the authority within 14 days if it does not employ the person named on the order, or when an employee subject to an order leaves [2]. It must also tell the employee in writing the total deducted, including any £1 charges, which can be shown on the payslip. Payments are usually due to the council by the 19th of the month following the deduction.
