Starting a new job is one of the most financially significant events in your working life. Most people focus entirely on the role itself and miss several important financial steps that can cost real money. This checklist covers every action to take before and during your first month.
Before You Leave Your Current Employer
Get Your P45
Your employer must provide a P45 when your employment ends. This document shows:
- Your tax code at the time of leaving
- Your earnings in the current tax year
- Tax paid so far this tax year
Give this to your new employer on or before your first day. Without it, they’ll put you on an emergency tax code, which often results in overpaying tax in your first few months.
Confirm Your Pension Options
Ask your old employer:
- What happens to your workplace pension — are you leaving mid-year?
- If you have an old enough pot to trigger minimum transfer rights, you have options to move it to a new provider or leave it with the old scheme
- Whether any unvested employer matching contributions will be forfeited if you leave now
Time Your Leaving Date for Tax Efficiency
If possible, try to leave at the end of the tax month rather than mid-month to avoid messy partial-month calculations on your final pay. If you’re leaving mid-year and won’t start immediately, consider whether you’ll be tax-overpaid for the year and can reclaim it.
At Your New Employer: Week One Admin
Provide Your P45 (Or Complete a Starter Checklist)
If you have a P45, give it to HR or payroll as soon as possible. If you don’t have one:
- Your employer will ask you to complete an HMRC Starter Checklist
- You’ll declare which of Statement A, B, or C applies to your situation:
- A: First job since last 6 April, no JSA/ESA/state pension received
- B: This is your only job but you had another earlier in the year
- C: You have another job at the same time
Choosing the wrong statement leads to under- or over-payment of tax.
Check Your Tax Code
Your new employer will tell you what tax code they’re using. The standard tax code for 2026/27 is 1257L — this gives you the full £12,570 personal allowance. Common variations:
| Tax code | What it means |
|---|---|
| 1257L | Standard — full personal allowance |
| 1257L W1/M1 | Emergency/week/month basis — likely to over-deduct |
| BR | All income taxed at basic rate — second job or P45 missing |
| D0 | All income at higher rate — wrong for most people |
| K codes | Negative allowance — tax debt being collected |
| NT | No tax deducted — only for specific circumstances |
If your tax code is BR, D0, or W1/M1 and this is your primary job, contact HMRC via 0300 200 3300 or online to correct it.
Pension: The Most Important First-Week Decision
Don’t Opt Out
You will be automatically enrolled into your employer’s pension scheme. The minimum contributions in 2026/27 are:
- Employee contribution: 5% of qualifying earnings (between £6,240 and £50,270)
- Employer contribution: 3% of qualifying earnings
- Total minimum: 8%
Your employer’s matching may be more generous than the minimum. Often employers will match higher employee contributions (e.g., employee pays 5%, employer pays 5%) — read the pension scheme booklet carefully.
Opting out is almost always a financial mistake. You’re forfeiting free employer contributions. The only exceptions are if you’re in serious financial difficulty or if you’re close to the Lifetime Allowance.
Consider Increasing Above the Default
Many people are enrolled at the minimum percentage and never change it. Yet the difference between 5% and 8% employee contribution (with employer matching) over a career is tens of thousands of pounds.
If your new salary has increased, consider increasing your pension contribution rate on day one — before you’ve become used to receiving the higher net pay.
Opt for Salary Sacrifice If Available
Ask HR whether pension contributions can be made by salary sacrifice (sometimes called SMART pension or salary exchange). Under salary sacrifice:
- Your gross salary is reduced by the pension contribution amount
- You pay no income tax or National Insurance on that portion
- Your employer may save NI too, and some employers pass this saving to your pension
For a standard rate taxpayer, salary sacrifice saves approximately £8 per £100 of pension contribution compared to the relief-at-source method. For a higher-rate taxpayer, the total saving is around 42%.
Benefits Administration: Critical Updates
If you receive any means-tested benefits, starting a new job — especially at a higher salary — is a required change of circumstances that you must report promptly.
| Benefit | Who to notify | Method |
|---|---|---|
| Universal Credit | DWP (via UC Journal online) | Within the same month as change |
| Housing Benefit | Local council | As soon as possible |
| Council Tax Reduction | Local council | As soon as possible |
| Working Tax Credits | HMRC | Within 1 month |
| Child Tax Credits | HMRC | Within 1 month |
| Free School Meals eligibility | School / LA | Before the next term |
Failing to report promptly creates overpayments you’ll have to repay. The DWP and HMRC have access to PAYE real-time information (RTI) and will eventually see the change.
Student Loan Repayments
If you have a student loan, check a few things at your new employer:
- Your Plan type (1, 2, 4, or 5) — give this to payroll so they deduce correctly
- Whether your new salary crosses the repayment threshold (this varies by plan — see our student loan guide)
- If you’re changing jobs mid-year, your repayments will restart with the new employer based on each pay period only — this can lead to underpayment if you had pauses in employment (it settles at annual tax return stage)
Benefits in Kind: Understanding Your Package
Many employers offer benefits beyond salary. Understand the tax implications before selecting benefits:
| Benefit | Tax treatment |
|---|---|
| Company car | Taxable benefit in kind — calculated on CO2 emissions and list price |
| Private medical insurance (PMI) | Taxable benefit in kind — reported on P11D |
| Dental/optical | Taxable if employer-paid |
| Childcare vouchers (legacy schemes) | Tax-free up to limits; new Tax-Free Childcare is separate |
| Cycle to Work scheme | Tax and NI saving via salary sacrifice |
| Gym membership | Taxable unless specific conditions apply |
| Canteen meals | Usually exempt if available to all employees |
| Staff discount | Usually exempt within limits |
| Death in service (life cover) | Tax-free payout; not a benefit in kind while employed |
| Income protection | Premiums are not a benefit in kind; payouts are taxed as income |
For company cars specifically, electric vehicles have very low benefit-in-kind rates (currently 3% for 2026/27) — making EV car schemes exceptionally tax-efficient.
Insurance: The Gap Between Jobs
If you’re between jobs (even for a short period), check:
- Private health insurance: If you had it through your old employer, it ended on your leaving date. Check your new employer’s waiting period.
- Life and income protection: Employer-based group schemes end immediately. If you have personal policies, they continue regardless.
- Travel insurance: If your old job included business travel cover, this has ended.
Make a Day-One Payroll Checklist
On your first day or during induction, tick off with HR:
- ☐ P45 submitted (or Starter Checklist completed)
- ☐ Tax code confirmed as 1257L
- ☐ Bank account details lodged with payroll
- ☐ Pension scheme enrolled — confirm contribution rates and method
- ☐ Salary sacrifice options discussed
- ☐ Student loan plan type confirmed
- ☐ Benefits selection made / pending deadline noted
- ☐ Car allowance / company car arrangements if applicable
Related Guides
- How to Read a Payslip — understanding your first payslip
- Got a Promotion? Financial Checklist — if you’re also moving up internally
- Salary Sacrifice Complete Guide — getting the most from your pension contributions
- Universal Credit and Work — how employment affects UC