Tax code · 2026/27

SK500 means £5,000 is added to your taxable pay

Tax code SK500 is a K code. Instead of a tax-free allowance you get £5,000 a year added to your taxable income, £417 a month, so you pay tax on more than your salary. K codes are used when taxable benefits, untaxed income or tax owed from an earlier year are worth more than your personal allowance.

What does each part of SK500 mean?

The number after the K is multiplied by 10 to give the amount added to your taxable pay each year: 500 × 10 = £5,000.
Common causes are company cars or medical insurance, state pension paid without tax deducted, or tax owed from an earlier year being collected through PAYE.
HMRC caps the deduction so no more than half of your pay in any period is taken as tax under a K code.
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 SK500?

The table shows income tax and take-home pay in 2026/27 for four salaries with code SK500, compared with the standard code S1257L. National Insurance is not affected by your tax code.

Salary	Tax with SK500	Tax on standard code	Take-home with SK500	Per month
£25,000	£6,091	£2,446	£17,915	£1,493
£35,000	£10,061	£4,501	£23,144	£1,929
£50,000	£16,361	£8,982	£30,644	£2,554
£75,000	£27,389	£19,482	£44,101	£3,675

On £35,000 the effective rate with SK500 is 33.9%, against 18% on the standard code, a difference of £5,560 a year. Use the take-home pay calculator with your own salary, pension and student loan.

Frequently asked questions

Is tax code SK500 correct for me?

SK500 is correct if you have taxable benefits or untaxed income worth more than your personal allowance, or HMRC is collecting an underpayment. Compare the deductions in your Personal Tax Account with what you actually receive.

How much tax do I pay on £35,000 with tax code SK500?

On £35,000 with code SK500 income tax is £10,061 a year in 2026/27, leaving take-home pay of £23,144 (£1,929 a month) after National Insurance of £1,794. On the standard code it would be £4,501.

How do I change tax code SK500?

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.