Top questions and answers existing and new employers ask in administering the Pay As You Earn income tax and national insurance scheme.What is an income tax code?An income tax code is a reference number which may also include letters or be entirely letters which determines the amount of gross pay which is free of income tax deductions and may also determine the way in which income tax should be deducted. If the tax code contains a number this number represents the amount of tax free income an employee can earn in a financial year, for example 522L means an employee has a tax free personal allowance of 5,225 pounds. A BR tax code actually means basic rate and all the employees gross pay is subject to a tax deduction at the prevailing basic rate of tax.What does week 1 of month 1basis mean?Week 1 and Month 1 basis is an instruction to the employer operating a PAYE scheme to not calculate the income tax on a cumulative basis which is the normal basis but instead the employer has to calculate the income tax to be deducted on a non cumulative basis. A non cumulative basis is the total gross pay […]

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