Starting your first job is exciting — but there’s a lot to sort financially that nobody formally teaches you. Get the foundations right now and you’ll save thousands over the coming years.
Here’s everything to check, set up, or understand in your first month of employment.
1. Tax Code
What it is: A code from HMRC that tells your employer how much tax-free income you’re entitled to before deducting income tax.
What you should have: Most people in their first job should be on 1257L — which represents the £12,570 Personal Allowance for 2026/27.
Emergency codes to watch for:
- 1257L W1 or M1 — “Week 1/Month 1” basis, meaning tax is calculated as if every payday is your first. Can lead to overpaying tax.
- BR — All income taxed at basic rate (20%). No personal allowance applied. Common error if admin goes wrong.
- OT — No personal allowance at all.
Action: Complete your employer’s Starter Checklist honestly (it’s replaced the old P46). If you’re on an emergency code after your second payslip, contact HMRC on 0300 200 3300 or via your Personal Tax Account at tax.service.gov.uk.
2. National Insurance Number
What it is: Your unique NI number (format: AA 12 34 56 A) links your earnings, tax, and National Insurance contributions to your state benefit record — including your eventual State Pension.
Where to find it: On your payslip, P60, or on letters from HMRC. If you’ve never received one, you can apply through GOV.UK.
Why it matters: Every year of NI contributions builds toward your State Pension. You need 35 qualifying years for the full new State Pension (2026/27: £221.20/week). Starting early means you’re building your pension record from day one.
Action: Locate your NI number. Keep it safe. Check it appears correctly on your payslips.
3. Workplace Pension Auto-Enrolment
What happens automatically: If you earn over £10,000/year and are aged 22–66, your employer must enrol you into a workplace pension within three months of starting.
Minimum contributions (2026/27):
| Who contributes | Minimum rate |
|---|---|
| You (employee) | 5% of qualifying earnings |
| Employer | 3% of qualifying earnings |
The 5% you contribute comes from your pre-tax salary in most cases (through salary sacrifice) — meaning it costs you less in take-home pay than it sounds.
Should you opt out? Almost never. Opting out means losing your employer’s 3% contribution — that’s free money you’re turning down. The exception might be if you’re in acute financial hardship, but even then, the opt-out should be temporary.
Action: Don’t opt out. Check which pension provider your employer uses. Log in to your pension account and make sure the contributions appear within 3 months.
4. Payslip — What to Check Every Month
Your payslip is a legal document. Check these every month:
| Item | What it tells you |
|---|---|
| Gross pay | Your salary before any deductions |
| Tax code | Should be 1257L for most; flag if different |
| Income tax deducted | Should match HMRC’s tables for your earnings |
| National Insurance | Employee NI + confirms you’re building your record |
| Student loan | Should only deduct if above your plan’s threshold |
| Pension contribution | Should show both your and employer’s contributions |
| Net pay | What hits your bank account |
Red flags: Wrong tax code, student loan deductions on the wrong plan, missing pension contributions.
5. Student Loan Repayments
If you have a student loan, repayments are collected automatically through PAYE — you don’t need to do anything. But check it’s right:
| Plan | Who | Threshold (2026/27) | Rate |
|---|---|---|---|
| Plan 1 | Pre-2012 students (England/Wales) | £24,990 | 9% above threshold |
| Plan 2 | Post-2012 England/Wales undergraduates | £27,295 | 9% above threshold |
| Plan 4 | Scotland | £31,395 | 9% above threshold |
| Plan 5 | Post-2023 undergraduates | £25,000 | 9% above threshold |
| Postgraduate Loan | Master’s/doctoral loan | £21,000 | 6% above threshold |
Common mistake: Wrong plan deductions. If you’re a Plan 2 borrower having Plan 1 deducted, you’re overpaying. Check your loan plan at slc.co.uk and inform your employer.
6. Set Up an Emergency Fund
Starting work means starting to build financial resilience. Your first financial goal after getting paid:
Target: 3 months of essential expenses in an easy-access savings account.
Why: Unexpected job loss, car repair, boiler breakdown. Without emergency savings, any of these can spiral into debt.
Practical start: Open an easy-access savings account (Marcus, Chase, Monzo Savings Pots — all currently paying around 4–5% AER). Set up a standing order for even £50–£100/month from payday.
7. Open the Right Bank Account
If you’re still using a student or basic account, review whether it’s optimised for your new income:
- Chase UK (free): 5% AER on current account balances up to £250,000 — unbeatable for earning on everyday money
- Monzo (free): Best budgeting and spending analytics
- Starling (free): Clean, full-featured, no fuss
- First Direct (free): If you want telephone banking + 7% AER Regular Saver
See our bank account comparison guides for full reviews.
8. Understand Your Employee Benefits
Many employers offer benefits that new employees miss:
Check for:
- Additional employer pension contributions if you contribute more
- Private medical insurance (often subsidised)
- Life insurance / death in service (typically 2–4x salary)
- Income protection / group income protection
- Cycle to Work scheme (save 20–40% on a bike via salary sacrifice)
- Season ticket loans (interest-free)
- Employee Assistance Programme (free counselling, legal advice)
Read your employee handbook or ask HR. Value that’s already included in your package.
9. Start Building a Credit History
You’ll need credit history for mortgages, phone contracts, and some rental agreements. Start now:
Practical steps:
- Register on the electoral roll at your address — adds ~50 points on most credit score models
- Open a basic credit card; use it for small purchases and pay it off in full every month
- Don’t apply for lots of credit at once — each application leaves a search mark
Check your credit score for free via Experian, Equifax, or TransUnion — all offer free access.
10. File a Self-Assessment Return (If Required)
Most employees don’t need to file a tax return — PAYE handles it. But you do need to register for Self Assessment if:
- You earn over £100,000 (Personal Allowance taper applies)
- You have additional income (freelance, rental, investments over £1,000)
- You need to claim the High Income Child Benefit Charge
- You’re a company director
If this applies, register at GOV.UK before 5 October following the tax year end (5 April). Don’t miss this — penalties start at £100 for late filing.
First Job Financial Checklist Summary
| Task | Priority | Done? |
|---|---|---|
| Confirm tax code is 1257L | Essential | ☐ |
| Locate and record NI number | Essential | ☐ |
| Confirm pension auto-enrolment | Essential | ☐ |
| Check payslip is correct | Monthly | ☐ |
| Verify correct student loan plan deduction | If applicable | ☐ |
| Open easy-access savings account | High | ☐ |
| Start emergency fund (£50+/month) | High | ☐ |
| Register on electoral roll | High | ☐ |
| Read employee benefits handbook | Medium | ☐ |
| Open a credit-building credit card | Medium | ☐ |