Understanding the D0 Tax Code

Published on August 17, 2022

Tax CodesIncome Tax

D0 Tax Code

The D0 tax code means all your income is taxed at the higher rate, which is currently 40%. Let's break down how the D0 code will affect your paycheck, why you might have this code, and what to do if it's wrong.

What is a D0 tax code?

The D0 tax code is used for people who earn a lot. If you have this code, you don't get the tax-free personal allowance and have to pay 40% tax on everything you earn.

How much tax will you pay?

Under the D0 code, you will lose 40% of your earnings to tax. For instance, if you make £40,000, you'll pay £16,000 in tax. This leaves you with a monthly pre-National Insurance pay of £2,000.

Why might you have a D0 code?

You get a D0 code when you have multiple ways of earning money and your personal allowance is already used up by another income source. This is for additional income over the higher rate threshold of £50,270 for this tax year.

For example, if you have a job that pays £54,000 and then get another job, the new job's income will have a D0 tax code and be taxed at 40%.

D0 vs. BR code: What's the difference?

Both the D0 and BR tax codes assume you have another income using your personal allowance. BR means you're taxed at the basic rate of 20%, thinking you'll make less than £50,270 total. D0 means you'll make more than £50,270, so a 40% tax rate is applied.

Is your D0 code correct?

If you're on a D0 tax code, it's usually because HMRC thinks you have more than one source of income pushing you into a higher tax bracket.

What if your tax code is wrong?

If your D0 code isn't right, call HMRC at 0300 200 3300 or visit their website to update them about your income. This helps them set the correct tax code for you.