Key facts
- Cumulative is the normal method — tax is calculated on your total year-to-date earnings.
- Week 1 / Month 1 (non-cumulative) treats each pay period as if it were the first in the year.
- Non-cumulative codes are indicated by W1, M1, or X after the tax code.
- On a cumulative code, over- and underpayments are automatically corrected across the year.
- On a non-cumulative code, corrections only happen when HMRC issues a cumulative code.
Two Ways to Calculate Tax
Under the PAYE system, there are two methods for calculating how much Income Tax to deduct from an employee’s pay:[1]
- Cumulative basis — the normal method, which looks at the entire tax year to date
- Non-cumulative basis (Week 1 / Month 1) — a temporary method that treats each pay period in isolation
The method used is determined by your tax code. A code without a suffix (e.g. 1257L) operates cumulatively. A code with W1, M1, or X (e.g. 1257L M1) operates non-cumulatively.
Cumulative Basis Explained
Under the cumulative method, the payroll software:
- Calculates your total gross pay from 6 April to the current pay period
- Calculates your total tax-free allowance from 6 April to the current pay period
- Subtracts the allowance from gross pay to find cumulative taxable pay
- Applies the tax bands to the cumulative taxable pay
- Subtracts tax already deducted in earlier pay periods
- The result is the tax due this pay period
Example (cumulative, 1257L, monthly):
- Month 3 gross pay: £2,500/month (£7,500 cumulative)
- Cumulative tax-free: £1,047.50 × 3 = £3,142.50
- Cumulative taxable: £7,500 − £3,142.50 = £4,357.50
- Tax at 20%: £871.50
- Tax already paid in months 1–2: £581.00
- Tax due in month 3: £290.50
Key advantage: If you start work mid-year, the cumulative method accounts for the unused allowance from earlier months. This means you pay less tax initially until your allowance is “caught up,” then the correct amount each month thereafter.
Week 1 / Month 1 Basis Explained
Under the non-cumulative method, the payroll software treats each pay period as if it were the very first one. It does not consider previous earnings or tax deducted:[2]
- Takes this period’s gross pay only
- Allows one period’s worth of tax-free pay (e.g. £1,047.50 for a monthly pay period)
- Taxes the remainder at the appropriate rates
Example (non-cumulative, 1257L M1, monthly):
- Each month: gross pay £2,500
- Tax-free: £1,047.50
- Taxable: £1,452.50
- Tax at 20%: £290.50 every month, regardless of when you started
Side-by-Side Comparison
| Feature | Cumulative | Week 1 / Month 1 |
|---|---|---|
| Considers year-to-date earnings | Yes | No |
| Accounts for unused allowance from earlier periods | Yes | No |
| Self-correcting (adjusts for over/underpayments) | Yes | No |
| Tax deducted each period | May vary | Same each period |
| Used for | Normal ongoing employment | Emergency codes, temporary situations |
| Refunds built in | Automatic | Only when switched to cumulative |
When Non-Cumulative Codes Are Used
HMRC applies non-cumulative codes in several situations:[3]
- Emergency tax codes — when HMRC does not have enough information
- Mid-year tax code changes — sometimes HMRC issues a non-cumulative code temporarily to prevent a large one-off adjustment
- Starter without P45 — the employer may operate a non-cumulative code until HMRC confirms the correct one
- Tax code reviews — while HMRC investigates your code, it may switch to non-cumulative
What You Should Do
If you find W1, M1, or X on your payslip:
- Check whether you have given your P45 to your employer
- If you do not have a P45, make sure you have completed the starter checklist
- Log in to your HMRC Personal Tax Account to review your tax code
- Contact HMRC on 0300 200 3300 if the code has not changed within a few weeks
Tip: Do not panic if you are on a non-cumulative code. It is temporary. Once the correct cumulative code is applied, any overpayment of tax will be automatically refunded through your wages.
Frequently Asked Questions
Why might I be on a non-cumulative code?
HMRC uses non-cumulative (Week 1 / Month 1) codes as a temporary measure when it does not have complete information about your tax position. This is common when you start a new job without a P45, when your tax code is being reviewed, or when an emergency tax code is applied. Once HMRC has the correct information, it will issue a cumulative code.
Can I request a change from Week 1 to cumulative?
You cannot directly request the change, but you can prompt HMRC to review your code by providing your P45 to your employer, completing a starter checklist, or contacting HMRC directly. Once HMRC is satisfied it has the right information, it will issue a cumulative code.
Will I get a refund when switched to cumulative?
Possibly. When your employer receives a cumulative code, the payroll software recalculates your tax from the start of the tax year. If you have overpaid (which is common after several months on a non-cumulative code), the overpayment will be refunded through your next pay packet.
Does Week 1 / Month 1 affect National Insurance?
No. National Insurance is always calculated on a non-cumulative (per-period) basis anyway. The cumulative vs non-cumulative distinction only affects Income Tax calculation.
Further Reading
- Emergency Tax Codes — the most common reason for non-cumulative codes
- How Tax Codes Work — understanding what the numbers and letters mean
- Checking & Correcting Your Tax Code — how to review and fix your code
- The P45 Process — why providing a P45 prevents emergency codes
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Sources
- Tax codes — GOV.UK
- Understanding your employees' tax codes — GOV.UK
- Emergency tax codes — GOV.UK