UK Tax Codes Explained: What Your Tax Code Means

What Is a Tax Code?

Your tax code tells your employer how much income tax to deduct from your pay each month. It's set by HMRC and appears on your payslip, P45, and P60. Getting it right means you pay the correct amount of tax — not too much, not too little.

The Standard Tax Code: 1257L

Most people in the UK have the tax code 1257L for the 2025/26 tax year. Here's what it means:

• 1257 — Your personal allowance is £12,570 (multiply by 10). This is the amount you can earn tax-free each year.
• L — You're entitled to the standard tax-free personal allowance.

Common Tax Code Letters

Letter	Meaning
L	Standard personal allowance
M	You've received Marriage Allowance from your partner
N	You've transferred Marriage Allowance to your partner
T	HMRC needs to review your code (includes other calculations)
0T	No personal allowance — all income is taxed (e.g., new job, no P45)
BR	All income taxed at basic rate (20%) — common for second jobs
D0	All income taxed at higher rate (40%)
D1	All income taxed at additional rate (45%)
NT	No tax deducted
S	Scottish Income Tax rates apply (e.g., S1257L)
C	Welsh Income Tax rates apply (e.g., C1257L)
K	You owe more tax than your allowance covers (e.g., company car benefits)
W1/M1	Emergency tax code — calculated on current pay only, not cumulative

Where to Find Your Tax Code

• Payslip — Usually at the top, near your employee details
• P60 — Your end-of-year tax summary (issued by April)
• P45 — Given when you leave a job
• HMRC online account — Log in at gov.uk/personal-tax-account
• Tax code notice — HMRC sends these by post or online when your code changes

Emergency Tax Codes

If you start a new job without giving your employer a P45, you might be put on an emergency tax code like 1257L W1 or 1257L M1. This means tax is calculated on each pay period independently rather than cumulatively across the year.

Emergency tax codes often result in overpaying tax. Once HMRC updates your records (usually within a few weeks), your employer will adjust your code and you'll receive a refund through your pay.

What If Your Tax Code Is Wrong?

A wrong tax code means you're paying too much or too little tax. Common reasons for errors:

• Starting a new job without providing a P45
• Having multiple jobs and allowances split incorrectly
• Company benefits (car, health insurance) not reflected
• Marriage Allowance not applied

To fix it:

1. Check your tax code on your HMRC personal tax account
2. Contact HMRC online or by phone (0300 200 3300)
3. Your employer cannot change your tax code — only HMRC can

How Tax Codes Affect Your Take-Home Pay

Your tax code directly determines your personal allowance. A higher number means a larger tax-free amount. For example:

• 1257L = £12,570 tax-free (standard)
• 1100L = £11,000 tax-free (reduced, perhaps due to benefits)
• K475 = You owe £4,750 more than your allowance (added to taxable income)

Use our salary calculator to see exactly how different tax codes affect your take-home pay.