Useful definitions

For an employee with a BR tax code you must deduct tax from all their pay at the basic rate – currently 22%. You can operate code BR either on a:

• Cumulative basis, which means that you will be working on a running total basis of ‘total pay to date’ at each pay day

Or

• Non-cumulative basis, instead of keeping a running ‘total of the pay to date’, you must treat each pay day as if it is the first week or month of the tax year. This is often referred to as week 1, month1.