What D1 actually does to your payslip
D1 is HMRC's "all-at-45%" code for secondary income sources where the additional-rate band is already reached by a primary source. The mechanics on the PAYE side are simple: every pound paid by the employer or pension provider is deducted at 45%, week one to week 52, with no Personal Allowance and no basic- or higher-rate band reset. The result is a heavy deduction on each payslip — but, in the rare situation where it is the correct code, it lines up exactly with the marginal additional rate you owe on that income.
D1 is most likely to appear in three scenarios:
- You already earn over £125,140 from a primary salary and you take on a second employment (consulting, lecturing, board fees) processed through PAYE.
- You begin a second pension drawdown while your main pension or salary keeps you above the additional-rate threshold for the year.
- Director scenarios where the company runs two separate PAYE schedules and the secondary one sits entirely above £125,140 cumulative income.
If those conditions are not met, D1 is the wrong code and you should ask HMRC to switch to D0 (40%), BR (20%), or a numerical L code as appropriate.
D1 vs D0 — the £5 per £100 difference
Comparing D0 (40%) and D1 (45%) gives a clean way to see whether your secondary source is on the correct code. For every £100 of gross secondary income:
- D0 deducts £40, leaves £60 net.
- D1 deducts £45, leaves £55 net.
- The £5 / £100 difference is what HMRC collects when the secondary source crosses into additional rate.
If your total income across all sources stays between £50,270 and £125,140 in 2025/26, D1 collects £5 per £100 more than it should — that money is refunded at year-end via P800 or Self Assessment, but you've been short of cash for 12 months in the meantime. Conversely, if your total income exceeds £125,140 and a secondary source is on D0 instead of D1, HMRC will issue a bill or simplified assessment for the £5 / £100 shortfall.
Three worked examples (UK 2025/26)
Example 1: £150k main + £20k consulting — D1 fits
Priya earns £150,000 as a partner-track lawyer and bills £20,000/year through a part-time consulting role processed via PAYE. The secondary employer uses D1.
Main contract (code 0T due to PA being fully tapered at £125,140+): basic £37,700 × 20% = £7,540, higher £74,870 × 40% = £29,948, additional £37,430 × 45% = £16,844. Tax from primary £54,332. Secondary on D1: £20,000 × 45% = £9,000. Total tax £63,332. Reconciliation on £170,000 with zero PA: basic £37,700 × 20% = £7,540, higher £74,870 × 40% = £29,948, additional £57,430 × 45% = £25,844. Total £63,332. Match — D1 is correct.
Example 2: £160k main + £15k pension on D0 — underpayment
Marcus earns £160,000 main and starts a £15,000/year personal pension drawdown. The provider applies D0 by mistake.
D0 deduction on pension: £15,000 × 40% = £6,000. Correct rate (additional): £15,000 × 45% = £6,750. Year-end shortfall £750 collected via P800 in the following autumn, or earlier through SA. Switching the pension code to D1 closes the gap month-to-month and removes the surprise bill.
Example 3: D1 on a source that should be BR — overpayment
Lena earns £40,000 main and an £8,000 evening job. The evening employer mistakenly applies D1 (perhaps a payroll input error).
D1 deduction on evening job: £8,000 × 45% = £3,600 tax. Correct (within basic rate, BR): £8,000 × 20% = £1,600. Overpayment £2,000. Lena either waits for the year-end P800 refund (autumn) or, more practically, phones HMRC mid-year and gets the secondary employer's code switched to BR via a coding notice. The refund then appears on the next payslip.
How to verify or change a D1 code
HMRC sometimes applies D1 automatically when prior-year data shows you crossing £125,140. If your circumstances are different this year — bonus deferred, redundancy, partner-only earner — D1 may overdeduct from month one. Follow this sequence:
- Sign in to your Personal Tax Account at gov.uk.
- Open "Pay As You Earn (PAYE)" and select the secondary employment or pension.
- Press "Tell HMRC about a change" and enter your expected gross for the year from all sources.
- HMRC issues a new code (P6) to the secondary payer within 2-4 weeks; the next payslip reflects the corrected deduction.
- If you've been on the wrong code for several months, HMRC's adjustment will collect or refund the difference automatically on the next payslip.
If the Personal Tax Account doesn't show the option you need, phone HMRC on 0300 200 3300. Have your NI number, both employers' PAYE references, and your year-to-date gross from each to hand.
Common mistakes with D1
- Assuming D1 is "wrong" because it deducts heavily — it's correct when total income clears £125,140.
- Forgetting that the PA taper between £100,000 and £125,140 is reconciled at year-end, not at source — additional cash may still be owed.
- Leaving D1 in place after redundancy or sabbatical reduces total income — phone HMRC promptly to switch to D0 or BR.
- Confusing D1 with K codes — D1 is no allowance + 45% flat; K codes are negative allowance + progressive bands.
- Believing D1 also handles NI — it doesn't. Secondary NI is calculated separately based on the source type (Class 1 if employed, Class 4 if self-employed, none if pension drawdown).
- Trying to negotiate a code with the employer — only HMRC issues coding notices; employers cannot override them.
Scotland: SD3, not D1
Scottish residents who pay Scottish income tax do not receive D1 codes. HMRC issues SD codes prefixed "S": SD2 for advanced-rate flat 45% and SD3 for top-rate flat 48%. The conceptual job is the same — flat-rate deduction on secondary sources with no allowance — but the rate and the prefix differ. If your main contract is processed by an employer outside Scotland and you've moved residency mid-year, HMRC re-issues the code; expect a small reconciliation in the following spring.
Welsh residents are issued "C" prefix codes (C-D1 for the additional-rate equivalent), but Welsh income-tax rates currently mirror UK rates, so the take-home outcome is identical to D1 in England and Northern Ireland for the additional-rate band.
When to use this calculator
Run the figures any time you take on a secondary PAYE source while your main income is firmly above £125,140 — or any time HMRC issues a D1 coding notice you weren't expecting. The flat 45% deduction substantially affects the cash value of the secondary engagement (an offer of "£20k consulting on top" lands as £11,000 net under D1, not the headline £20k). Couples with one high earner and one in basic rate should usually route additional work to the lower-earning partner where possible.