Starting a New Job in January? What Happens to Your Tax and Payslips

Starting a new job in January is exciting — fresh role, fresh routine, fresh pay packet. But it’s also the time when many people get a shock on their first payslip, especially if the tax looks higher than expected.

Here’s what normally happens to your tax and payslips when you start a new job in January — and what you can do if something doesn’t look right.

📄 What Happens When You Start a New Job

When you begin a new role, your employer needs information to tax you correctly. This usually comes from one of two places:

• A P45 from your previous employer
• A starter checklist (sometimes called a New Starter Declaration)

If payroll doesn’t have the right details straight away, you may be placed on a temporary tax code.

⚠️ Why Your First Payslip Might Look Wrong

It’s common for your first payslip to show:

• Higher tax than expected
• A different tax code
• Slightly lower take-home pay

This often happens because you’ve been put on an emergency tax code until HMRC confirms your details.

The good news? This is usually temporary.

🔢 Common Tax Codes for New Starters

You might see one of these codes on your first payslip:

• 1257L W1 / M1 – Temporary code, tax calculated per period
• BR – All earnings taxed at basic rate (20%)
• D0 – All earnings taxed at higher rate (40%)

Once HMRC updates your records, your employer will apply your correct tax code automatically.

🧾 What Your First Payslip Should Include

Even if the tax code is temporary, your payslip should still show:

• Your gross pay
• Income Tax deducted
• National Insurance
• Pension contributions (if applicable)
• Your tax code and pay period

Always keep a copy — your first payslip sets the baseline for the rest of the year.

🔄 How Long Does It Take to Fix the Tax Code?

In most cases:

• HMRC updates your tax code within a few weeks
• Your employer applies the new code automatically
• Any overpaid tax is refunded through your wages

You don’t usually need to chase payroll unless the issue continues beyond the second or third payslip.

🧠 What You Can Do to Speed Things Up

To avoid problems:

• Give your employer your P45 as soon as possible
• Complete the starter checklist accurately
• Check your HMRC Personal Tax Account after your first payday
• Query anything unusual early — before it snowballs

📅 What This Means for Your P60

Your January start will be included in your P60 at the end of the tax year.
That P60 will show:

• Total pay from your new employer
• Tax paid under the corrected tax code
• Any adjustments made during the year

Catching issues early means a cleaner, more accurate P60 later.

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