Updating employee tax codes

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

From 6 April 2015, all employees with an L suffix tax code increase by 60, for example, 1000L becomes 1060L. Also anyone with a week 1/Month 1 tax code changes to a cumulative tax code. HMRC may advise you of changes to tax codes for individual employees using form P9.

Sage One Payroll automatically calculates the tax code uplift 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 employees’ 2014/2015 tax codes and the updates tax code for the new tax year. A message appears prompting you to confirm the changes.

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

To update an individual employee tax code

  • 1. Employees tab > click the employee > Edit.
  • 2. Change the tax code in the Current Tax Details section > Save.

To update all employees on L tax code suffixes

  • 1. Process your first pay run in the new tax year.

The Prepare Employee Tax Codes for Tax Year 2015/2016 window appears.

  • 2. Check each employee in the list to make sure their new tax code is correct.
  • 3. Click Save.

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