D0 Tax Code: Meaning and How to Check It

D0 is a flat-rate tax code that instructs payroll to deduct income tax at the higher rate of 40% on every pound of earnings from that employment. There is no personal allowance, no basic-rate band, and no progressive calculation — it is simply 40% of gross pay, deducted before you receive anything.

The letter D stands for "higher rate" (just as D1 stands for "additional rate"). The zero does not mean zero tax — it is simply the designator HMRC uses to distinguish this code from numbered codes that include a tax-free amount.

Like BR, D0 is a legitimate code with specific uses. The concern is when it appears on the wrong employment. At 40% of all gross earnings, the tax taken can be double or more than what the correct code would produce. An employee earning £30,000 on D0 will lose £12,000 a year in income tax — equivalent to every penny of their personal allowance and basic-rate band being ignored.

D0 is appropriate in the following circumstances:

• Second job for a higher-rate taxpayer: If your first job already takes your earnings above the higher-rate threshold of £50,270, additional income within the higher-rate band is taxable at 40%; allowance tapering or additional-rate income can change the overall result. If that additional income comes from a second employer, HMRC issues D0 for the second employment to collect tax at the right rate without applying an allowance or basic-rate band that has already been used.
• Pension income for a higher-rate taxpayer: If you receive a private pension and employment income, and your combined income puts you firmly in the higher-rate band, HMRC may instruct the pension payer to use D0 to collect the appropriate rate on that income.
• Personal allowance and basic-rate band fully used elsewhere: More broadly, D0 can be correct whenever both the personal allowance and the entire basic-rate band have been used by another income source, leaving income within the higher-rate band to be taxed from this particular employment.

In each of these cases, D0 is not a penalty — it is simply HMRC ensuring the right amount of tax is collected across your total income picture.

D0 becomes incorrect and potentially very costly when it appears in circumstances where a lower code should apply:

• Main or only job: If you have one employer and D0 appears on your payslip, you are paying 40% on all earnings with no personal allowance and no 20% band. This is almost certainly wrong unless your income genuinely exceeds £50,270 and there is another employment absorbing the lower-rate bands — which would be unusual with only one employer listed.
• After leaving a second job: If you previously had two jobs and left the main one, D0 may remain on the surviving employment from the period when both jobs were active. HMRC should update the code automatically, but it can take a pay period or two.
• Circumstances changed and HMRC has not yet updated the code: A significant drop in income from another source, a pension ceasing, or a change in employment status can all mean that D0 is no longer appropriate, but HMRC's records have not yet caught up.
• Administrative error at payroll or HMRC: Occasionally a coding notice is misread, entered incorrectly, or relates to a different employment reference.

The following example shows the difference in monthly and annual tax between code D0 and the correct code 1257L on a £30,000 salary.

An incorrect D0 code on a £30,000 salary costs the employee £709.50 per month — over £8,500 per year — compared with the correct 1257L code. Even against the BR code (which would produce £500/month), D0 costs an additional £500 per month. This illustrates why D0 on the wrong job is one of the most severe tax-code errors an employee can experience.

Just as D0 applies the higher rate of 40%, D1 applies the additional rate of 45% on all earnings from that employment. D1 is used when a taxpayer's income from all sources is so high that every pound of income from a particular employment is taxable at the additional rate (above £125,140 for 2026–27).

D1 is relatively rare because it only applies when combined income exceeds £125,140. High PAYE income alone no longer creates a Self Assessment requirement from 2024/25 onwards. Other circumstances can still require a return; use HMRC’s eligibility checker. D1 ensures that the PAYE deduction on a secondary income source approximately reflects the rate that will apply on that income at the year-end reconciliation.

The practical difference between D0 and D1 is a further 5 percentage points of tax. On a secondary income of £20,000, D0 deducts £8,000 per year while D1 deducts £9,000 per year — a difference of £1,000 annually or approximately £83.33 per month.

As with D0, D1 on the wrong job is a serious error that should be corrected through HMRC as soon as it is identified.

Scottish flat-rate codes use different names and rates. Do not read SD0 as the Scottish version of 40% D0.

HMRC chooses the code using the overall income record. See Scottish codes and residency for the progressive bands and residence rules, or BR versus D0 for an unprefixed code comparison.

Compare the payslip code with HMRC's coding notice, then check all employment, pension and income records in your personal tax account. Ask payroll to correct a transcription or starter-processing error; ask HMRC to review an issued code that does not fit your circumstances.

If a corrected cumulative code and complete pay and tax records reach payroll, it can recalculate the year-to-date tax. A W1/M1 correction does not automatically refund earlier deductions. Ask payroll which pay run will include the notice.

After the year ends, HMRC may send a P800; tax calculation letters are sent between June and March of the following tax year. Self Assessment repayments follow that account instead. An overpayment must be established from the complete record, and there is no guaranteed next-payday refund. See the refund routes.