Tax Code D1 W1 Explained

What does D1 W1 mean?

D1 is the additional-rate counterpart to BR and D0: it tells the employer or pension provider to deduct income tax at the additional rate of 45% on every pound of pay from this source, with no personal allowance and no basic- or higher-rate bands applied. It is reserved for taxpayers whose primary income has already consumed both the personal allowance and the entire £125,140 of basic and higher-rate bands, which in practice means people earning £125,140 or more from a main job who also have a second source of taxable income. Typical examples include senior executives with a non-executive directorship, partners with a secondary salaried role, or pension drawdown income paid alongside a high salary. D1 becomes a problem when HMRC has overestimated your main income — for instance after a redundancy, a major salary cut, or the removal of a one-off bonus from prior assumptions. In that case you will see a deduction of 45% on a secondary income that would otherwise have been taxed at 20% or 40%, leading to a sizeable overpayment. The W1 suffix changes how the code is applied. Instead of recalculating against year-to-date earnings every payday (the normal cumulative method), payroll treats each pay period as a fresh start. You receive 1/52nd (W1), 1/12th (M1) or one slice (X) of your tax-free allowance and basic-rate band each period, and any unused allowance from earlier in the year is ignored. That stops a refund being issued before HMRC has confirmed your figures, but it can leave you slightly overpaid until a cumulative code is reissued. W1 codes are almost always temporary holding codes that resolve within one or two pay cycles after your first FPS submission reaches HMRC.

Breakdown of the code

• D1

  Letter pair

  Deduct at additional rate — flat 45% with no allowance, used for income on top of additional-rate primary pay.

• W1

  W1

  Non-cumulative weekly basis. Each pay period is treated independently — no smoothing across the year.

Worked example

Senior executive with a £30,000 secondary directorship on top of £200k base on £30,000 (paid monthly).

£30,000 × 45% = £13,500/year — correct only when primary income exceeds £125,140.

Who should be on D1 W1?

• New starters who could not provide a P45 and completed a starter checklist
• Employees whose previous employer reported their leaver pay late
• People returning to PAYE after self-employment or working overseas
• Cases where HMRC has paused a cumulative calculation pending a record review

Common problems

• Bonuses and one-off payments are taxed harder than under a cumulative code because unused allowance from earlier months is ignored.
• The code persists for three or more months — usually a sign HMRC has not received the FPS submission needed to reconcile your record.
• You have switched jobs and your former employer issued the P45 late, so the W1/M1/X code stays in place longer than it should.

What to do if D1 W1 looks wrong

1. Provide your employer with a P45 from your previous job, or complete a starter checklist accurately (Statement A, B or C).
2. Wait one or two pay cycles — most emergency codes auto-correct as soon as HMRC receives the first FPS submission from your new employer.
3. If the code persists into a third payslip, sign in to your personal tax account and confirm both employments are listed correctly.
4. Phone HMRC on 0300 200 3300 quoting the date you started and the date your last job ended — they can issue a cumulative P9 the same day.
5. Once a cumulative code is reissued, any overpaid tax is refunded automatically through your next payslip.