Your tax code tells your employer or pension provider how much Income Tax to take from your pay or pension, and HMRC tells them which code to use. 1257L is the code currently used for most people who have one job or pension. You get a tax code for each job or pension you have.
Key points
✓You can find your tax code on your payslip, in the HMRC app, online, or on a Tax Code Notice letter from HMRC.
✓The numbers show how much tax-free income you get from that job or pension, with the final digit replaced by a letter.
✓You are on an emergency tax code if your code ends in W1, M1 or X, or you see NONCUM on your payslip.
✓If your code needs to change, HMRC will tell you and your employer the new code within 15 working days.
✓Employers and pension providers cannot take more than half of your pre-tax wages or pension when using a K tax code.
What does tax code 1257L mean?
It means you get the standard tax-free Personal Allowance of £12,570. The L shows you are entitled to the standard allowance, and the numbers show how much tax-free income you get from that job or pension.
To work out your number, HMRC starts with your Personal Allowance and takes off any income you have not paid tax on and any other deductions, such as company benefits. It then replaces the final digit with a letter.
GOV.UK's example: medical insurance from your employer worth £1,570 is taken away from the £12,570 allowance. That leaves a tax-free amount of £11,000, so the tax code is 1100L.
What does each letter in a tax code mean?
The letters show your situation and how it affects your tax-free allowance and the rates you pay. GOV.UK has a tool that explains your exact code.
Letters
What they mean
L
You are entitled to the standard tax-free Personal Allowance
M
Marriage Allowance: you have received a transfer of 10% of your partner's Personal Allowance
N
Marriage Allowance: you have transferred 10% of your Personal Allowance to your partner
T
Your tax code includes other calculations to work out your Personal Allowance
K
You have income you are not paying tax on which is more than your Personal Allowance
0T
Your Personal Allowance has been used up, or you have started a new job and your employer does not have the details it needs to give you a tax code
BR
All your income from this job or pension is taxed at the basic rate, usually if you have more than one job or pension
D0
All your income from this job or pension is taxed at the higher rate, usually if you have more than one job or pension
D1
All your income from this job or pension is taxed at the additional rate, usually if you have more than one job or pension
NT
You are not paying any tax on this income
S
Your income or pension is taxed using the rates in Scotland
C
Your income or pension is taxed using the rates in Wales
W1, M1, X or NONCUM
You are on an emergency tax code
If you have Marriage Allowance, our guide to Marriage Allowance explains how the transfer works.
Are tax codes different in Scotland and Wales?
Yes. A code starting with S means you pay Scottish rates, and one starting with C means you pay Welsh rates. If you pay Scottish Income Tax and get the standard Personal Allowance, your code is S1257L.
Code
Scotland
Wales
Allowance used up or new job
S0T
C0T
All income at the basic rate
SBR
CBR
All income at the next rate up
SD0 (intermediate rate)
CD0 (higher rate)
Higher bands
SD1 (higher), SD2 (advanced), SD3 (top)
CD1 (additional)
Why has my tax code changed?
HMRC changes your code if you need to pay a different amount of tax. This usually happens when your income or circumstances change, for example if you:
start a new job
get taxable state benefits
start to get income from an additional job or pension
have interest on your savings above your Personal Savings Allowance
see your weekly State Pension amount change
start or stop getting benefits from your job
claim Marriage Allowance or tax relief on expenses
pay the High Income Child Benefit Charge through your wages or pension
need to pay back the Winter Fuel Payment or Pension Age Winter Heating Payment
have been on the wrong tax code and owe tax
You can use the Check your Income Tax online service to find out why your code changed.
What is an emergency tax code?
It is a temporary code that works out your tax on what you are paid in that week or month only, as if you were paid that amount every week or month of the year. This could mean you pay the wrong amount of tax. The code ends in W1 if you are paid weekly, M1 if you are paid monthly, or X if your pay dates vary.
You usually get one when a new employer does not have your previous income and tax details. Give your new employer your P45 from your previous job, and ask your previous employer for one if you did not get it. It can take up to 35 days from when you start for HMRC to update your code.
You might also be put on one if you start getting company benefits or the State Pension. GOV.UK says this is normal, and that you will have the code until the end of the tax year.
What does a K tax code mean?
It means you have income or deductions higher than your tax-free Personal Allowance that are not already being taxed. Your employer or pension provider uses the code so that you pay tax on that other income through your pay. Reasons include:
paying tax you owe from a previous year through your wages or pension
getting State Pension or taxable state benefits
getting company benefits you need to pay tax on, such as a company car
getting more interest on your savings than your Personal Savings Allowance
What do I do if my tax code is wrong?
Check and update your details through the Check your Income Tax online service, which GOV.UK says is the quickest way. A wrong code usually means HMRC has incorrect or missing information.
Sign in to the Check your Income Tax online service.
Check your employment, pension, estimated taxable income, company benefit and expenses details.
Update your details if anything is wrong or missing.
Claim tax relief on your employment expenses if you have any.
If you are paid monthly, your new code should be on your next or the following payslip. If you are paid weekly, it should be on your third payslip. If your payslip does not show it, ask your employer whether they have it. If you started a new job, wait 35 days for HMRC to get your income details before contacting them.
Will I get a refund if I was on the wrong tax code?
Usually yes, once HMRC has your income details for the tax year. If you paid too much, HMRC asks your employer or pension provider to refund the difference in your pay, usually when they use your new code. If you have not paid enough, HMRC can adjust your tax code to collect the tax over one or more tax years, if possible.
After the end of the tax year, HMRC sends you a letter if you have not paid the right amount. Our guide to claiming a tax refund covers every route, and our tax guides list what else we cover.