Updating employee tax codes for the new tax year

Each employee gets a new or updated tax code at the start of the tax year. This determines how much tax deducts from their pay throughout the year.

From 6 April 2016, all employees with an L suffix tax code increase by 40, for example, 1060L becomes 1100L. Also anyone with a week 1 / month 1 tax code changes to a cumulative tax code. When you process the first pay run of the new tax year, Sage One Payroll automatically prompts you to update your employees’ tax codes. HMRC may advise you of changes to tax codes for individual employees using form P9.

Sage One Payroll automatically calculates the tax code increase for employees on the L tax code. When you process your first pay run in the new tax year, a window appears showing the relevant employee’s 2015/2016 tax codes and the updated tax codes for the new tax year. Simply confirm the changes, then process your payroll as normal.

If HMRC have sent you a P9 notice for individual employees, you need to change the tax code in their employee record.

To update an individual employee tax code

  • 1. Employees tab > click the employee > Edit.
  • 2. Current Tax Details section > change the tax code, if required > Save.

To update all employees on L tax code suffixes

  • 1. Process your first pay run in the new tax year.
  • 2. From the Prepare Employee Tax Codes for Tax Year 2016/2017 window > check the new tax codes are correct > Save.

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