Tax code · 2026/27

SD3 means all of this income is taxed at 48%

Tax code SD3 taxes every pound from this job or pension at the Scottish top rate of 48%, with no tax-free allowance at all. It is normally used for a second job or second pension where your £12,570 personal allowance is already used up by your main income. On £10,000 from this source you would pay £4,800 in tax.

What does each part of SD3 mean?

D3 codes are used when HMRC expects all of this income to fall into the Scottish top rate band because your other income already fills the lower bands.
If this is your only job, this code is almost certainly wrong and you should contact HMRC to have it corrected and any overpaid tax refunded.
The S prefix means you are a Scottish taxpayer, so Scottish income tax rates and bands apply to your earnings and pension income.

How much tax do you pay with code SD3?

The table shows income tax and take-home pay in 2026/27 for four salaries with code SD3, compared with the standard code S1257L. National Insurance is not affected by your tax code.

Salary	Tax with SD3	Tax on standard code	Take-home with SD3	Per month
£25,000	£12,000	£2,446	£12,006	£1,000
£35,000	£16,800	£4,501	£16,406	£1,367
£50,000	£24,000	£8,982	£23,006	£1,917
£75,000	£36,000	£19,482	£35,489	£2,957

On £35,000 the effective rate with SD3 is 53.1%, against 18% on the standard code, a difference of £12,299 a year. Use the take-home pay calculator with your own salary, pension and student loan.

Frequently asked questions

Is tax code SD3 correct for me?

SD3 is normally correct only for a second job or second pension where your first source of income already uses your personal allowance. If SD3 is on your only income, it is almost certainly wrong and you are overpaying tax.

How much tax do I pay on £35,000 with tax code SD3?

On £35,000 with code SD3 income tax is £16,800 a year in 2026/27, leaving take-home pay of £16,406 (£1,367 a month) after National Insurance of £1,794. On the standard code it would be £4,501.

How do I change tax code SD3?

You cannot change it yourself; only HMRC can issue a new code. Update your details in your HMRC Personal Tax Account or call 0300 200 3300 with your National Insurance number and details of your income and benefits. HMRC sends the new code to your employer and any tax overpaid in the year is refunded through your pay.

What does the S prefix mean?

The S prefix means HMRC has recorded your main home as being in Scotland, so Scottish income tax rates and bands apply. This is decided by where you live, not where you work.