Glossary · UK
What is Cumulative Tax?
PAYE method where year-to-date pay and allowances are used each pay period to true-up tax.
Full Definition
Cumulative tax is the standard PAYE method used with most tax codes (e.g. 1257L on a cumulative basis). Each pay period your employer looks at total pay and total Personal Allowance entitlement since 6 April, then deducts tax already paid — so over- or under-payments self-correct as the year progresses. Cumulative coding is what produces refunds in subsequent paydays after a tax-free month off, or extra tax after a one-off bonus. The alternative is Week 1 / Month 1 basis (non-cumulative), used by HMRC when prior pay details are missing — that ignores year-to-date and treats each period in isolation.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.