If you’ve spotted the letter H on your UK payslip, it isn’t a tax code. Tax code H doesn’t exist in HMRC’s list of PAYE suffix letters. What you’re looking at is your National Insurance category letter, and HMRC assigns Category H to apprentices under the age of 25.1GOV.UK. National Insurance Rates and Categories – Category Letters It sits in a different field from your income tax code and does a completely different job.
What NI Category H Actually Controls
National Insurance category letters tell payroll software which contribution rates to apply. Most employees are on Category A, the default. Category H is reserved for apprentices under 25 on an approved apprenticeship, and your employer selects it when setting up your payroll record. It stays in place until you turn 25 or leave the apprenticeship.
The main effect is a lower NI bill for your employer. Your own employee NI is calculated at the same rates as most other workers, so being on H doesn’t cut your personal contributions. The saving sits on the employer side, which is the policy point of the category: making it cheaper for businesses to take on younger apprentices.
The Rates for 2025–2026
For the tax year running 6 April 2025 to 5 April 2026, the employee contribution rates on Category H are:2GOV.UK. National Insurance Rates and Categories – Contribution Rates
- Up to £242 per week (£1,048 per month): 0%.
- £242.01 to £967 per week (£1,048.01 to £4,189 per month): 8%.
- Over £967 per week: 2%.
Employer contributions work differently. The employer pays 0% up to £967 per week (£4,189 per month) and 15% on anything above that. That £967 threshold is the Apprentice Upper Secondary Threshold, roughly £50,270 a year.3GOV.UK. Rates and Allowances – National Insurance Contributions Since most apprentice salaries sit well below that, many employers pay no NI at all for their under-25 apprentices.
Why H Is Not a PAYE Tax Code
Your PAYE tax code is a separate number-and-letter combination, usually something like 1257L, and it controls how much income tax your employer withholds. HMRC’s official list of tax code suffix letters includes L, M, N, T, K, BR, D0, S, C, and NT, among others. H is not on that list.4GOV.UK. Tax Codes – What Your Tax Code Means
On your payslip, the two identifiers live in different places:
- The tax code (e.g., 1257L) is usually near the top, next to your tax period and gross pay. The number is your tax-free Personal Allowance divided by ten; the letter describes your personal circumstances for income tax.
- The NI category letter (e.g., H) sits in or next to the National Insurance section. It reflects your employment type, age, and apprenticeship status.
Once you know which field is which, the H stops looking mysterious. It’s saying: this person is an apprentice under 25, so calculate NI accordingly. It says nothing about your income tax.
The Tax Code Most Apprentices Actually Have
Apprentices under 25 typically receive tax code 1257L, the most common code in the UK. The L means you get the full standard Personal Allowance, and 1257 represents £12,570 of tax-free income.5GOV.UK. Income Tax Rates and Personal Allowances Your employer spreads that allowance across pay periods, so if you’re paid monthly you get roughly £1,047 tax-free each month. Anything above that is taxed.
Earnings between £12,571 and £50,270 are taxed at the basic rate of 20%. An apprentice earning £18,000 a year would have £12,570 tax-free and pay 20% on the remaining £5,430, which comes to about £1,086 in income tax for the year. That calculation is identical whether your NI category is H or A. The category letter doesn’t touch your income tax.
You might see a different code if you have a second job (often BR, meaning every pound from that source is taxed at 20%), if you started work without giving your new employer a P45, or if HMRC is collecting an underpayment from an earlier year through your code. None of those situations have anything to do with your NI category.
Scotland and Wales
If you live in Scotland, your tax code has an S prefix (for example, S1257L) because Scottish income tax rates and bands differ from the rest of the UK. Welsh residents see a C prefix. Your NI category stays H either way. National Insurance is UK-wide and isn’t affected by Scottish or Welsh income tax devolution.4GOV.UK. Tax Codes – What Your Tax Code Means
If You Think Your Tax Code Is Wrong
The fastest way to check is HMRC’s “Check your Income Tax” online service. Sign in, review your employment details and estimated income, and update anything that looks wrong.6GOV.UK. Tax Codes – If You Think Your Tax Code Is Wrong You can also use your Personal Tax Account to check company benefit details, update your address, and see your current code.7GOV.UK. Personal Tax Account – Sign In or Set Up
You’ll need your National Insurance number, which is on your payslip, P60, or previous letters from HMRC.8GOV.UK. Your National Insurance Number A recent payslip helps too, since it shows your current code and the employer PAYE reference. If you can’t use the online service, call HMRC. Once they process the update, they notify your employer, and the corrected deductions should appear on your next payslip.
Claiming a Refund If You’ve Overpaid
Wrong codes lead to overpayments more often than people think, especially for apprentices who start work partway through a tax year or change employers. After the tax year ends on 5 April, HMRC compares what you earned against what was deducted. If you’ve overpaid, HMRC sends a P800 tax calculation letter, usually during the summer.
If your P800 says you can claim online, you’ll need the reference number from the letter and your National Insurance number. You can claim through the online bank transfer service, your Personal Tax Account, or the HMRC app, or you can phone HMRC and ask for a cheque.9GOV.UK. If Your Tax Calculation Letter (P800) Says You’re Due a Refund Some P800 letters say a cheque will be sent automatically; in that case you don’t need to do anything.
If you don’t get a P800 but think you’ve overpaid, contact HMRC after the tax year ends and ask them to reconcile your account. You have four years from the end of the relevant tax year to claim. An overpayment from 2022/23 must be claimed by 5 April 2027; one from 2025/26 must be claimed by 5 April 2030. After that, the year is closed and HMRC won’t repay.