What D1 means
D1 is the top flat-rate code outside Scotland. Every pound from the job is taxed at 45%. It suits someone whose main income is already in the additional-rate band, above £125,140 in 2026/27, so anything extra is taxed at that rate. At that level the Personal Allowance has tapered away completely.
| Code | Rate on all pay from this job |
|---|---|
| BR | 20% |
| D0 | 40% |
| D1 | 45% |
In Wales the codes carry a C (CD1 is 45%, the same as England for 2026/27). Scotland has its own set: SD1 is 42% and SD3, the top rate, is 48%.
How PAYE applies D1 on a payslip
Pay for the period is rounded down to the pound and taxed at 45%. Nothing earlier in the year changes it. The payslip shows D1 and one income tax line. National Insurance is worked out separately on this job's pay.
Worked example, 2026/27
| Pay this month | Income tax at 45% | Employee NI |
|---|---|---|
| £1,000.00 | £450.00 | £0.00 (below the £1,048 threshold) |
| £2,500.00 | £1,125.00 | £116.16 |
Figures from PayDocs' 2026/27 rule set, which follows HMRC's PAYE specification. The 50% limit on tax in one pay period doesn't come into play, because 45% is below it.
What the employer does
- Apply the code exactly as HMRC sends it and update the record before the next payday when it changes.
- Don't swap it for BR or D0 because the employee asks. Only HMRC can change it.
- Show D1 on the payslip, so the employee can see why the deduction is large.
Questions
Why is my second job on D1?
Because HMRC expects your other income to be above £125,140, so pay from this job is taxed at the additional rate.
Can D1 be wrong?
Yes, if HMRC's estimate of your other income is too high. Check your income details in your HMRC online account; overpaid tax is corrected through your code or refunded after the tax year.
Sources
- GOV.UK — Tax codes: what your tax code means
- GOV.UK — Understanding your employees' tax codes: what the letters mean
- HMRC — Rates and thresholds for employers 2026 to 2027
- HMRC — Specification for PAYE Tax Table Routines, version 24.0
Official sources checked 4 October 2026. This guide explains how pay documents work; it is not tax or legal advice.
