Update an employee's tax code (P6 or P9)

Summary

How to update an employee's tax code in Sage Payroll.

Description

Start of a new tax year

For the 2025/2026 tax year, the personal allowance remains at £12,570. This means that the emergency tax code also remains at 1257L. However, if you receive a P9 or P6 from HMRC, you need to update an individual employee's tax code.

NOTE: Clear any Week 1/Month 1 flags for your employees before you process the first payroll of the 2025/2026 tax year.

Changes during the year

HMRC sends a notification to inform you when a tax code has changed. This is a P6 or P9 notification and usually happens when:

An employee's tax-free income (Personal Allowance) changes. For example, they start or stop receiving a taxable benefit like a company car
A new employee has provided a P46, and HMRC inform you of the correct tax code

Resolution

When one of your employees’ tax codes changes, HMRC will send you a P6 or P9 notification. You’ll receive either:

A paper form
An internet notification if you’re registered to use PAYE Online – internet service

To access your online tax code notices:

Log in to the government gateway.
From the Business tax account home page, select Messages. Select PAYE for employers messages.
Select View your Tax Code Notices.

What you need to do:

If it's a P9, you’ll need to update the employees tax code only
If it's a P6, you’ll need to update the employees tax code and previous employment year to date values
NOTE: If you receive more that one notification for an employee, just use the most recent one.

▼What is a P6

HMRC issues a P6 to employers to provide details of an employee’s tax code, previous pay and tax. You need to get the leaving date from the employee. If your employee doesn’t know their leaving date, use the date of the P6 form.

▼What is a P9

HMRC issues a P9 to employers at the start of a tax year. It shows the tax code the employee should be on.

▼How to update an employee tax code and previous pay

Change their tax code

From Employees, select the relevant employee.
Under Current Tax Details, enter the new Tax Code.
If required, select or clear the Week1/Month1 checkbox.
Select Save.

Enter their previous pay and tax

If a new employee has provided a P46, you may receive a notification from HMRC to inform you of their new tax code. In this case, you also need to enter details of previous pay and tax.

From the Previous Tax details section, choose Employee declaration P45

From the Circumstances list, choose one of the following options:

A	Select this declaration if this is the employee’s first job since the last 6 April. They also didn't get taxable Jobseeker’s Allowance or Employment and Support Allowance. Also no taxable Incapacity Benefit, or state or occupational pension.
B	Select this declaration if this is the employee’s only job but since last 6 April they’ve had another job. Or has received taxable Jobseeker’s Allowance. Or Employment and Support Allowance, or taxable Incapacity Benefit. The employee doesn’t receive a state or occupational pension.
C	Select this declaration if the employee currently has another job. Or select if they receive a state or occupational pension.

In the Tax Code box, enter the tax code from the P6 or P9.
In the Leaving Date box, enter the previous employment leave date. Your employee should provide this. If your employee doesn’t know their leaving date, use the date of the P6 form.
Clear or select the Week1/Month1 check box. If you select this check box, skip to step 12.
In the Final Pay Period list, enter the week or month of the employee’s final pay run in their previous employment.
In the Total Pay To Date box, enter the previous pay from the P6 or P9.
In the Total Pay To Date box, enter the previous tax from the P6 or P9
Save your changes.
NOTE: The employee's Status will change to Starting this pay run (P45 Part 3).

Next time you process this employee’s payments, the tax due calculates using the employee’s new tax code. And if the tax code is cumulative, the tax year values to date.

CAUTION: A 'Tax code invalid' message may mean you’ve entered an X in the Tax Code field. An X means the employee is on a week1/month1 basis. You only need to tick the week1/Month1 box. Don't enter X into the tax code field.