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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