K Tax Code Calculator UK 2025/26

K tax code calculator UK 2025/26 — work out how K100, K500 or K1000 affects your pay. Negative allowance, 50% pay cap, w

Quick answer: A K-code means a NEGATIVE personal allowance — usually owed tax or large benefits-in-kind. K500 adds £5,009 to your taxable income. HMRC caps K-code deductions at 50% of pay per period; the rest carries over.
Mustafa Bilgic
Reviewed by Mustafa Bilgic · UK Calculator Editor ·

Calculator

K tax codes are the UK's most punishing — instead of giving you tax-free pay, they ADD income to your taxable salary. Here's how the math works and when (if ever) you should accept the K-code or push back to HMRC.

How k tax code calculator works in 2025/26

A K code reverses the normal allowance logic. Instead of "1257L = £12,570 tax-free", "K500" means "£5,009 ADDED to your taxable income before tax is calculated".

Formula: K-addition = (K-number × 10) + 9 = added taxable income. So K500 → £5,009/year, K1000 → £10,009/year, K2000 → £20,009/year.

Why HMRC issues a K code:

  • Large benefits-in-kind (BIK) — e.g. company car >£12,570 BIK value, expensive medical insurance, school fees
  • Tax owed from previous year — being collected via this year's PAYE
  • State pension exceeding personal allowance for older workers still in employment
  • Underpaid tax via self-assessment being recovered via PAYE
  • Multiple incomes where total exceeds personal allowance bandwidth

HMRC 50% rule: No matter how big your K-code, the tax deducted in any single pay period cannot exceed 50% of that period's gross pay. Excess carries over to subsequent periods. Without this cap, some K-coded pensioners would have £0 take-home.

Worked example: £35,000 + K500 (£5,009 added BIK)

Notional taxable: £40,009. Tax: £37,700×20% + £2,309×40% (above £50,270? no, £40,009 well under) → all at 20% = £8,001.80. NI £1,794.40. Take-home £25,203.80.

Gross: £35,000 → Take-home: £25,203.80/year (£2,100.32/month)

Worked example: £25,000 + K1000 (£10,009 added)

Notional taxable £35,009. Tax £4,487.80. NI £994.40. Take-home £19,517.80. Without K code take-home was £21,519.60 — K1000 cost £2,001.80.

Gross: £25,000 → Take-home: £19,517.80/year (£1,626.48/month)

Worked example: £60,000 + K2000 (£20,009 added)

Notional £80,009. Tax £19,431.60 (some in 40% band). NI £3,210.60. Take-home £37,357.80. K2000 cost £8,000 vs 1257L baseline.

Gross: £60,000 → Take-home: £37,357.80/year (£3,113.15/month)

Frequently asked questions

What does a K tax code mean?
K = a negative personal allowance. Instead of getting £12,570 tax-free, you have an amount ADDED to your taxable income. Common after a company car, school fee BIK, or owed tax from prior years.
How is a K code calculated?
K-number × 10 + 9 = pounds added to taxable income. So K500 adds £5,009/year (£417.42/month). The "+9" rounds out to make the calculation work cleanly with payroll software.
Can a K code take all my pay?
No — HMRC has a 50% rule. The tax deducted in any single pay period cannot exceed half your gross pay for that period. Excess carries over to next periods, smoothing the deduction.
Is a K code permanent?
Usually no. K codes typically last one tax year while the underpayment is recovered. Once cleared, you go back to 1257L (or whatever standard code applies). BIK-driven K codes are permanent until the BIK changes.
How do I get rid of a K code?
Three options: (1) Pay the underpayment directly to HMRC as a lump sum (changes your code immediately), (2) Reduce/give up the BIK (e.g. return company car), (3) Wait for the year to end and the K code to drop off.
What's the difference between K500 and K1000?
K1000 adds twice as much income as K500 (£10,009 vs £5,009). Tax cost difference at basic rate: £1,000/year (20% × £5,000); at higher rate: £2,000/year. Higher K-numbers = bigger negative allowance = more tax.
Should I challenge a K code?
Yes if it's wrong (e.g. BIK no longer applies, owed tax already paid). Log into your Personal Tax Account and check the breakdown HMRC shows. Disagreements: call 0300 200 3300 with evidence (e.g. P11D showing reduced BIK).

Official UK Sources

Last reviewed: May 2026 against HMRC 2025/26 rates.

Related Calculators

Tax Code 1257L Explained Uk | Tax Code Br Explained Uk | Emergency Tax Calculator Uk 2025 26 | Tax Calculator | Salary Calculator