TL;DR: Tax code 0T M1 is an emergency, non-cumulative tax code applied by an employer or pension provider when HMRC has not given them the employee's correct cumulative tax code. It applies no personal allowance (the "0T" element) and treats each pay period in isolation (the "M1" suffix means "month 1") rather than spreading allowances across the tax year so far. The result is that income is taxed at the basic, higher, and additional rates from the first pound of each pay period, often producing a significantly higher tax deduction than the employee's true position. The code is usually corrected once HMRC issues the proper cumulative code, with overpaid tax refunded through PAYE or at the end of the tax year through a Self Assessment or P800 calculation.
Last reviewed May 2026
Seeing 0T M1 on a payslip is one of the more confusing experiences in UK payroll. The tax deduction is often substantially higher than the employee was expecting, and the code itself looks like a string of random characters. In reality each part of the code has a specific meaning, and the resulting overdeduction is almost always temporary.
This guide explains exactly what 0T M1 means, why it is applied, the difference between 0T M1 and the related codes BR, D0, D1, and 0T cumulative, how the overdeduction is corrected, and the steps an employee can take to speed up the move back to the right tax code.
What 0T M1 means letter by letter
The "0T" part of the code tells the payroll system that the employee has no available personal allowance (the tax-free chunk of income that normally reduces taxable pay). The number 0 in the code is the personal allowance figure in tens of pounds, so 0T means zero allowance available. "T" is a generic suffix code that indicates the code is set by HMRC and the calculation is non-standard.
The "M1" suffix is short for "Month 1". It tells the payroll system to apply the code on a non-cumulative basis: each pay period is treated as if it were the first period of the tax year, with no allowance carried forward from earlier periods and no reconciliation against the year-to-date position. The equivalent "W1" suffix means "Week 1" for weekly-paid employees and works the same way.
Put together, 0T M1 means "tax this pay period with no personal allowance and on a non-cumulative basis, ignoring earlier periods in the tax year". The result is that the employee's pay is taxed at 20 percent on the basic-rate slice of the monthly threshold, 40 percent on the higher-rate slice, and 45 percent on the additional-rate slice, from the first pound, every pay period.
Why HMRC issues a 0T M1 code
0T M1 is most commonly issued when an employer or pension payer needs to operate PAYE on an employee but does not yet have a P45 from the previous employer or the cumulative tax code from HMRC. The code is essentially a safety default: it errs on the side of overcollecting tax until HMRC and the new employer have the information to apply the correct cumulative code.
Common triggers include: starting a new job without handing in a P45 from the previous employer (or where the P45 has not yet arrived); a second job where the personal allowance is already used against the first job; a pension being put into payment when the pension scheme does not yet have the correct cumulative code from HMRC; HMRC reissuing the code as 0T while it investigates an underpayment in a prior year; or a payroll system defaulting to 0T M1 when other information is missing.
0T M1 is also routinely applied to lump-sum payments from a pension under the pension freedoms rules. When a saver takes a flexible drawdown payment (a "uncrystallised funds pension lump sum" or a drawdown payment) from a pot they have not previously drawn from, the pension provider applies 0T M1 to the taxable element, which often produces a very large deduction that is corrected by HMRC after the year end.
How 0T M1 differs from cumulative 0T and the other emergency codes
0T cumulative (without the M1 suffix) also applies zero personal allowance, but on a cumulative basis. The cumulative version takes into account the pay-to-date and tax-to-date positions for the tax year so far, so when 0T cumulative is applied mid-year the payroll system can refund tax that was previously over-collected during periods where the personal allowance had been applied.
BR (basic rate) deducts a flat 20 percent on all earnings under the code, with no personal allowance. BR is most commonly used for a second job where the personal allowance is already used at the first job; for most second-job employees BR is the right code. BR is normally cumulative unless paired with a suffix.
D0 (D-nought) deducts a flat 40 percent on all earnings under the code. It is used where all earnings under that code should fall in the higher-rate band. D1 deducts a flat 45 percent on all earnings, used where all earnings under that code should fall in the additional-rate band.
0T M1 differs from all of these because it deducts tax across all three rate bands within the pay period rather than at a single flat rate, and because it ignores the year-to-date position. For an employee whose annual earnings would actually take them into higher-rate territory, 0T M1 can produce roughly the right total tax over a year; for an employee whose annual earnings would only fall in the basic rate band, 0T M1 typically overtaxes.
How the overdeduction is corrected
The correct cumulative code is normally issued by HMRC once the employer's first Full Payment Submission (FPS) reaches HMRC's RTI system and HMRC has matched the employee record to its database. This typically takes one or two pay periods after starting a new job. Once HMRC issues the cumulative code, the employer applies it from the next pay period, and the year-to-date PAYE calculation refunds any over-collected tax automatically.
If the corrected code is cumulative and the employee's pay history during the M1 period included overdeduction, the refund of the over-collected tax appears in the next pay period's payslip. The pay-after-tax figure can therefore look unusually high in the period the cumulative code is applied, which is the system correcting the prior over-collection.
Where the M1 code was applied to a flexible pension drawdown payment, the correction is typically done by HMRC at the year end through a P800 simple assessment, which calculates the actual tax due for the year and either issues a refund or asks for additional payment. The refund process can take several weeks. Pensioners taking large drawdown payments commonly receive substantial P800 refunds in the months after the year end.
How to speed up the correction
The first step is to give the employer the P45 from the previous employer (parts 2 and 3 of the P45). This carries forward the cumulative code from the previous job and avoids the need for an emergency code in most cases.
The second step is to complete the new starter declaration (formerly known as form P46) accurately at the new employer. The declaration asks whether this is the first job, a continuing job, or a job alongside another. The right answer ensures the employer applies the right starting code before HMRC issues a cumulative code.
The third step is to log into HMRC's personal tax account on GOV.UK and check what tax code HMRC has issued. If the code shown is not the cumulative code that should apply, the employee can update employment details online or call HMRC's PAYE helpline to ask for the code to be reissued.
The fourth step (where the code is applied to a pension drawdown) is to consider requesting a same-year tax refund through a P55, P50Z, or P53Z form depending on the type of payment. These forms allow flexible-drawdown overpayments to be refunded mid-year rather than waiting for the year-end P800. The right form depends on whether the drawdown was a one-off, the full pot, or part of an ongoing series.
Common scenarios and what 0T M1 looks like in practice
A typical scenario is an employee starting a new job in October without a P45, on an annual salary of 36,000 pounds (3,000 pounds a month). Under 0T M1 their first month's tax deduction would be roughly 600 pounds (20 percent on the basic-rate slice plus a small higher-rate element on any portion above the monthly threshold), compared with a correct cumulative deduction of roughly 380 pounds (allowing for the personal allowance). The overdeduction is around 220 pounds for that month.
Once HMRC issues a cumulative 1257L code the following month, the employer applies the new code and refunds the prior over-collection in the next pay period. The employee's November pay slip therefore shows a tax refund offsetting most or all of the October overdeduction.
For a flexible pension drawdown of 30,000 pounds (the first drawdown the saver has taken from the pot, 7,500 pounds being the 25 percent tax-free element and 22,500 pounds taxable), 0T M1 might deduct around 7,000 pounds in tax on the taxable element. If the saver had no other taxable income in the year, the actual tax due on a 22,500 pound payment is around 2,000 pounds (after personal allowance), so the saver is owed around 5,000 pounds in refund. The refund is typically claimed via a P55 form mid-year or arrives as a P800 after the year end.
How we verified this
The mechanics of 0T M1 described here reflect HMRC's PAYE technical guidance for employers, HMRC's Real Time Information rules, the Income Tax (Earnings and Pensions) Act 2003, and HMRC's published forms P50Z, P53Z, and P55 for reclaiming tax on flexible pension payments. The percentages cited are the statutory income tax rates for England, Wales, and Northern Ireland for 2025-26 (Scotland has its own rates and starter and intermediate bands). No invented HMRC reference numbers, case numbers, or payslip examples beyond the structural illustrations have been used.
Disclaimer: This article is general information about the 0T M1 tax code under UK PAYE rules. It is not personal tax advice. Tax codes and individual circumstances vary. Anyone with concerns about a specific PAYE deduction should check their personal tax account on GOV.UK, contact HMRC, or take advice from a qualified tax adviser.
Frequently asked questions
What does tax code 0T M1 mean?
0T M1 is a non-cumulative emergency tax code applied when an employer or pension payer does not have the employee's correct cumulative code from HMRC. The 0T part removes the personal allowance from the calculation. The M1 suffix tells the payroll system to treat the pay period in isolation, ignoring any pay or allowances from earlier in the tax year. The combination usually results in higher tax than the cumulative position would produce.
Will I get a refund if I have been on 0T M1?
Yes, in most cases. Once HMRC issues the correct cumulative tax code, the employer applies it and the year-to-date PAYE calculation automatically refunds any over-collected tax in the next pay period. For flexible pension drawdown payments where the year-end position cannot be corrected through PAYE, the refund typically arrives via a P800 simple assessment after the year end, or earlier through a P55, P50Z, or P53Z reclaim form.
How long does it take to get off 0T M1?
Typically one to two pay periods after starting a new job, once HMRC has matched the employer's first Real Time Information submission to the employee's record. Submitting a P45 from the previous employer at the start of the new job usually avoids the emergency code being applied at all. Logging into the personal tax account on GOV.UK and updating employment details can speed up the correction.
Is 0T M1 the same as BR?
No. BR deducts a flat 20 percent on all earnings under the code, suitable for a second job where the personal allowance is fully used at the first job. 0T M1 deducts tax across all three rate bands (20 percent, 40 percent, 45 percent) within each pay period, with no personal allowance and ignoring earlier periods. 0T M1 is therefore harsher than BR for an employee whose annual earnings would only fall in the basic-rate band.
Why did I get 0T M1 on a pension lump sum?
HMRC requires pension providers to apply 0T M1 to flexible pension payments where they do not have a cumulative tax code on file for the saver, which is normally the case the first time a saver draws from a pot. The result is that a large drawdown payment can attract a very high tax deduction at source. The overpayment is corrected after the year end through a P800, or can be claimed back during the tax year using a P55, P50Z, or P53Z form depending on the type of drawdown.
