A UK tax code tells your employer how much of your annual pay is tax-free, and which tax rules to apply. The standard code in 2026/27 is 1257L, meaning £12,570 of pay is tax-free (the Personal Allowance) with a standard L suffix. Other codes signal specific situations: BR (basic rate on all pay), 0T (no allowance), D0/D1 (all higher/additional rate), K (negative allowance), W1/M1 (emergency code).
How to read a tax code (the digits + suffix)
Almost every UK tax code has two parts: a number, then a letter (the "suffix"). Some have a prefix letter.
- The digits × 10 = your annual tax-free allowance. Code 1257L = £12,570 tax-free. Code 1100L = £11,000 tax-free.
- The suffix letter describes the rule. L = standard allowance. M = increased by Marriage Allowance (1383M = £13,830 tax-free). N = reduced by Marriage Allowance given to spouse. T = there's an adjustment HMRC wants to keep track of.
- The prefix letter changes how PAYE applies. BR / 0T / D0 / D1 / K / NT (more below).
So 1257L is "the £12,570 standard Personal Allowance, no special rules." It is the default for most employees with a single job and no benefits in kind.
Tax code letters explained
| Code | What it means | Usually applied because... |
|---|---|---|
| 1257L | Standard PA, single job | You're a regular employee |
| 1383M | You received Marriage Allowance | Spouse transferred £1,260 of PA to you |
| 1131N | You gave Marriage Allowance | You transferred £1,260 of PA to spouse |
| BR | 20% on every penny | Second job — no PA applied here |
| D0 | 40% on every penny | Second job, higher earner main job |
| D1 | 45% on every penny | Second job, additional rate main job |
| 0T | No allowance, normal bands | HMRC doesn't have your info yet |
| K prefix | You have negative PA | BIK or untaxed income exceeds PA |
| NT | No tax to deduct | Tax already paid elsewhere |
| 1257L W1/M1/X | Emergency tax | HMRC needs to update; corrects itself |
| S prefix | Scottish bands apply | You live in Scotland |
| C prefix | Welsh bands apply | You live in Wales |
The most common problem codes are BR, 0T, and any ending in W1/M1/X. These usually mean you're overpaying tax — see the emergency tax code page and the tax code decoder.
How your tax code is calculated
HMRC builds your code each year by:
- Starting with the standard Personal Allowance (£12,570).
- Adding any allowances you're due (e.g. Marriage Allowance, blind person's allowance).
- Subtracting any deductions for benefits in kind (company car BIK, private medical) and untaxed income (savings interest above the PSA).
- Subtracting any tax owed from previous years (HMRC sometimes recovers this by reducing the code).
- Dividing by 10 and adding the appropriate suffix.
How to check and fix your tax code
- Look at your latest payslip — top right usually shows the current code.
- Compare with the standard 1257L. If different, find out why.
- Cross-check with your HMRC Personal Tax Account (gov.uk/personal-tax-account) — same code should be shown.
- If you think it's wrong: phone HMRC on 0300 200 3300, or use the secure message function in your Personal Tax Account.
- HMRC update your code within 1-2 pay cycles. The wrong tax already paid is refunded through payroll (no separate refund process needed).
Decode your tax code in seconds
The tax code decoder explains your exact code letter-by-letter, shows what HMRC thinks your taxable income should be, and flags emergency or wrong codes.
Open the tax code decoder →Sources and methodology
Tax code structure and letters from HMRC PAYE notice gov.uk/tax-codes. Emergency code resolution from gov.uk/tax-codes/emergency-tax-codes. Personal Tax Account from gov.uk/personal-tax-account.
UK Tax Drag is not authorised by the Financial Conduct Authority and does not provide regulated financial advice — see the content disclaimer for the full position. The methodology page documents how every calculator is built and reviewed.
Related
- Tax code decoder — interactive walkthrough of your exact code
- What is an emergency tax code? — W1, M1 and X explained
- PAYE tax code traps — the most common wrong-code mistakes
- HMRC letter decoder — understanding the P2 coding notice
- Full UK money glossary
- FAQ library
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