Why Is My Tax So High?

Your income tax is calculated based on your earnings and which tax band your income falls into. If your tax appears high, it's usually because your income has increased, you've received additional payments, or your tax code has changed.

Common reasons your tax might be high

Bonuses or commission

When you receive a bonus or commission, it's added to your regular salary in that pay period. Bonuses are taxed at your marginal rate (the highest rate of tax you pay), which can make your tax appear much higher that month. This is normal – the bonus is taxed at the rate that applies to your total income for the year.

Overtime or additional hours

If you've worked overtime or additional hours, your gross pay increases. Overtime is subject to income tax just like your regular salary. If the overtime pushes your total income into a higher tax band, you'll pay tax at that higher rate on the overtime portion, which can make your tax appear higher.

Moving into a higher tax band

If your income has increased and you've moved into a higher tax band, you'll pay a higher rate of tax on the portion of your income above the threshold. This is normal and expected, but it can make your tax feel high, especially if the change happened mid-year.

Emergency tax code

If you're on an emergency tax code (often shown as 1257L W1 or 1257L M1), you're not getting the benefit of your full Personal Allowance spread across the year. This means you're paying more tax than you should be. Emergency tax is usually applied when you start a new job or HMRC doesn't have enough information about your income. Once your correct tax code is applied, you'll usually get a refund automatically.

Incorrect tax code

If your tax code is wrong, you might be paying too much tax. Your tax code determines how much tax-free income you're entitled to. Check your payslip – your tax code should match what HMRC has sent you. If it doesn't, or if you think it's incorrect, contact HMRC or check your personal tax account online.

Underpaid tax from previous years

If you underpaid tax in previous years, HMRC may collect it through your current tax code. This reduces your tax-free allowance, which increases the amount of tax you pay. You should receive a notice from HMRC explaining any adjustments to collect underpaid tax.

Benefits in kind

If you receive benefits in kind (like a company car or private healthcare), these can reduce your tax-free allowance. This increases the amount of your income that's subject to tax, which can make your tax appear higher.

What you can do

Start by checking your payslip to see exactly how much tax you're paying and why. Compare it to previous payslips to see what's changed. Use our tax calculator to estimate what your tax should be based on your current income – if there's a significant difference, something may need correcting.

If you're on an emergency tax code, this should resolve automatically once HMRC has the correct information. If you think your tax code is wrong, you can check it online through your personal tax account on GOV.UK or contact HMRC directly.

Remember that some tax increases are normal – if you've received a bonus, worked overtime, or had a pay rise, it's expected that your tax will increase. The UK uses a progressive tax system, so higher earners pay a higher percentage of their income in tax.

Related guides

For more information about UK tax and how it's calculated, see our UK Tax Guide. If you've received a bonus and want to understand why it's taxed more, read our guide on why bonuses are taxed so much.