D0 and D1 tell an employer or pension provider to tax everything from that source at a single rate with no tax free allowance: D0 at the 40% higher rate and D1 at the 45% additional rate. HMRC normally uses them on a second job or pension when your other income already uses your allowance and pushes you into the higher rate band (D0) or above £125,140 (D1).
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For the other codes see our guide to PAYE tax codes. This page covers D0 and D1 for people with more than one source of income.
What do the D0 and D1 tax codes mean?
HMRC’s standard wording on a coding notice is that tax code D0 shows all your income from this job or pension is taxed at the 40% higher rate, and D1 shows it is all taxed at the 45% additional rate. There is no tax free amount and no lower band on that source. Every pound is taxed at the one rate.
For 2026 to 2027 in England and Northern Ireland the higher rate of 40% applies from £50,271 to £125,140 and the additional rate of 45% applies above £125,140. D0 and D1 simply apply those rates to the whole of one income stream.
Why does HMRC use D codes on a second income?
You get a separate tax code for each job or pension. HMRC says your Personal Allowance is usually allocated to the job that pays the most, and a second job or pension will usually be on BR, D0 or D1. HMRC’s employer guidance lists D0 and D1 for a second job or pension.
The point is to collect the right tax in year. If your main salary already takes you past £50,270, any extra pay from a second source is taxed at 40%. A BR code would take only 20%, and you would owe the difference later. Our guide to tax on a second job sets out the wider rules.
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When does HMRC use D0?
HMRC’s PAYE Manual tells its staff to use code D0 when tax is due at the higher rate and all the allowances are fully given elsewhere. In practice that usually means:
- your main job or pension carries your Personal Allowance, often on a code such as 1257L
- your main income on its own is above the £50,270 point where higher rate starts
- you also have a second job, director’s fee or pension paid through PAYE
If your main income sits below £50,270, a D0 code on the second source may take too much, so check that HMRC has your estimated pay right. Our page on becoming a higher rate taxpayer explains what changes once you cross the threshold.
When does HMRC use D1?
The PAYE Manual says D1 charges the full taxable pay at the second higher rate, which is the 45% additional rate. It is used when your other income already takes you above £125,140. At that level your Personal Allowance has also gone: it goes down by £1 for every £2 of adjusted net income above £100,000 and is zero at £125,140 or above. That means your main job may also move to a code such as 0T. Our page on Personal Allowance tapering explains the taper.
How do D codes work in Scotland and Wales?
Scotland has more bands, so it has more D codes. HMRC’s employer guidance lists SD0 for the intermediate rate, SD1 for the higher rate, SD2 for the advanced rate and SD3 for the top rate, each for a second job or pension. Wales follows the UK bands, with CD0 for the Welsh higher rate and CD1 for the Welsh additional rate. Our page on S and C tax codes covers these in more detail.
How do D0 and D1 compare with other second income codes?
| Code | Rate on the whole of that income | When HMRC usually uses it |
|---|---|---|
| BR | 20% basic rate | Second job or pension, total income within the basic rate band |
| D0 | 40% higher rate | Higher rate is due and allowances are given elsewhere |
| D1 | 45% additional rate | Other income already above £125,140 |
| SD0 to SD3 | Scottish intermediate, higher, advanced or top rate | Second job or pension, Scottish taxpayer |
| CD0 or CD1 | Welsh higher or additional rate | Second job or pension, Welsh taxpayer |
What does a D0 code mean in pounds?
Illustration only. Alex lives in England and earns £70,000 from his main job on 1257L. He also takes £10,000 a year as a part time non executive director, paid through PAYE on D0. His main salary already uses his allowance and takes him past £50,270, so every pound of the fee is taxed at 40%: £4,000 deducted over the year by the second payer.
If the second payer had used BR instead, it would have deducted £2,000 and Alex would owe a further £2,000 after the year end. His total income of £80,000 is below £100,000, so his allowance is not reduced.
What if your D0 or D1 code is wrong?
A D code depends on HMRC’s estimate of your income from each source. If your main job ends, your hours drop or a large bonus does not happen, the estimate may be too high and the D code will overtax you. Sign in to the Check your Income Tax service or the HMRC app and check each employment or pension and your estimated taxable income. HMRC tells you and your employer any new code within 15 working days, and our guide on how to correct a wrong tax code explains the steps.
Overpaid tax is usually refunded through your pay once HMRC has your income details. Underpaid tax is collected, where possible, by adjusting your tax code over one or more tax years, and HMRC checks your tax after the year ends and writes to you if the amount was wrong.
Frequently asked questions
What is the difference between D0 and D1?
Only the rate. D0 takes 40% of everything from that source and D1 takes 45%. Both give no tax free allowance on that source.
Can my main job be on D0?
It is unusual. The PAYE Manual ties D0 to cases where your allowances are fully given elsewhere, so the D code normally sits on the smaller or second source while the main source carries the allowance.
Does a D0 code mean I am a higher rate taxpayer?
It means HMRC expects at least some of your income to be taxed at 40%, because the extra income falls in the higher rate band. Your tax across all sources is still worked out on your total income for the year.
Why has my code changed from BR to D0?
Usually because HMRC now estimates your total income above £50,270, for example after a pay rise in your main job. If your estimate is wrong, update it online so HMRC can reissue the code.
If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.
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Sources
- GOV.UK: manual page PAYE11025
- GOV.UK: What your tax code means
- GOV.UK: Income tax rates
- GOV.UK: How tax works if you have more than one job
- GOV.UK: Letters
- GOV.UK: manual page PAYE11015
- GOV.UK: How to update your tax code
- GOV.UK: If youve paid too much or too little tax
- GOV.UK: Rates and thresholds for employers 2026 to 2027
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 November 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.