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If you're employed and getting just the State Pension

The State Pension counts as taxable income but is paid to you without any tax taken off. If your State Pension, your job and any other sources of income add up to more than your tax-free allowances - such as Personal Allowance or Blind Person's Allowance - you'll need to pay tax on your total taxable income.

If tax is due on your State Pension, HM Revenue & Customs (HMRC) will normally arrange for this to be deducted by your employer from your earnings through the PAYE tax code system. They do this by reducing your tax-free allowances by the amount of State Pension income you receive. This ensures you pay the right of amount of tax due.

You can find out more about how your State Pension appears in your employment tax code by following the links below.

If your affairs are complex HMRC may also ask you to fill in a Self Assessment tax return. For example, if you have investment income above a certain level, or foreign income.

• Tax codes - the basics (money, tax and benefits section)

• Pensions, state benefits and your tax code (money, tax and benefits section)

• Introduction to Self Assessment (money, tax and benefits section)

• Do you have to pay tax in retirement?

If you're employed and getting more than one pension (including the State Pension)

If you're employed and get a company and/or personal pension you'll have several tax codes and payslips - from a combination of your employer and your pension provider(s).

If you're receiving the State Pension as well, HMRC usually try to collect all of the tax due on it from just one company/pension provider by reducing your tax-free allowance as described in the previous section. If you have several personal/company pensions they normally collect the tax due on each, from each pension provider separately.

Where you have more than one payslip and tax code it's important to understand and check them all. If you think a code is wrong you can ask to get it corrected. Read our guide below to find out more.

• If you have more than one tax code (money, tax and benefits section)

• Pensions, state benefits and your tax code (money, tax and benefits section)

• Employee tax and National Insurance (money, tax and benefits section)

Tax when returning to employment after retirement

If you start a new job after retiring your employer will need to tell HMRC so they can make sure you're paying the right tax.

If you weren't paying tax in retirement

You'll need to start paying tax if your total income including State Pension and/or any other pension you get together with your employment earnings exceeds your tax-free allowances - such as Personal Allowance or Blind Person's Allowance.

Once your employer tells HMRC that you've started work HMRC will issue a tax code and collect the right amount of tax through PAYE.

As described earlier, if tax is due on your State Pension, HMRC will account for this by reducing your tax-free allowances by the amount of State Pension you receive.

• Blind Person's Allowance (money, tax and benefits section)

If you were already paying tax in retirement

If you were previously paying tax through PAYE because you already had a company or personal pension, read the earlier sections of this guide to understand how you'll pay tax once you start work.

If you weren't previously in PAYE and were filling in a Self Assessment tax return in order to pay tax on your State Pension (and other income) you may be able to pay all of your tax through your employment tax code instead. Your new employer may be able to advise you about this or you can contact the Self Assessment Helpline.

• Contact the Self Assessment Helpline Opens new window

Working and on a low income?

If you're earning a wage and receiving a pension but you've still got a low income, you may be able to claim Pension Credit.

• Pension Credit - introduction

More useful links

• Tax on company, personal or foreign pensions (money, tax and benefits section)

• Tax on retirement annuities (money, tax and benefits section)

• Tax if you take your State Pension later on (money, tax and benefits section)

• National Insurance - the basics (money, tax and benefits section)

• Read more about tax on the Citizen's Advice website Opens new window

Useful contacts

• Pensions and retirement planning contacts