Your tax code is the single most consequential thing on your payslip that almost nobody checks. It tells your employer how much of your pay to treat as tax-free, and it is set by HMRC from information that is often incomplete — a benefit you no longer receive, a second job that ended, an estimate of untaxed income from three years ago. When it is wrong, the money comes out of your pay every month until someone notices.

Checking it takes about two minutes. This guide covers what each part of a code means, what the common codes do to your pay, and how to get one corrected.

How a tax code is built

A standard code has two parts: a number and a letter. The number is your tax-free allowance for the year with the final digit removed. The letter tells your employer which rules apply.

1257L is the code most employees have. The 1257 represents the £12,570 personal allowance, and L means you get the standard allowance with nothing unusual attached. The personal allowance has been frozen at £12,570 since April 2021 and is currently frozen until April 2031, which is why the same code has been standard for so long.

One detail that surprises people who check the arithmetic: HMRC's pay tables actually give you £12,579 of free pay on code 1257L, not £12,570. The rule is to multiply the code by ten and add nine. Because the code rounds your allowance down to the nearest £10, HMRC adds the £9 back so nobody is worse off from the rounding. It is a small thing, but it explains why a hand-calculated figure can be a pound or two out from your payslip.

What the letters mean

L — the standard personal allowance. Most people.
M — you have received 10% of your spouse's allowance through the marriage allowance. £12,570 + £1,260 = £13,830, so the code is 1383M.
N — you have transferred 10% of your allowance to your spouse. £12,570 − £1,260 = £11,310, so the code is 1131N.
T — your code includes other calculations HMRC wants to review, often the personal allowance taper above £100,000.
S prefix — you are a Scottish taxpayer, so Scottish rates apply. C prefix — Welsh, though Welsh rates currently match the rest of the UK.

BR, D0 and D1: the flat-rate codes

These give you no personal allowance at all and tax every pound at a single rate. They are normal on a second job or a pension, where your allowance is already used up by your main income.

BR — everything at the 20% basic rate.
D0 — everything at 40%.
D1 — everything at 45%.
In Scotland the equivalents are SD0 (21%), SD1 (42%), SD2 (45%) and SD3 (48%).

A BR code on your main job is the classic expensive mistake. On a £35,000 salary, 1257L produces £4,484.20 of income tax. BR on the same salary produces £7,000 — an extra £2,515.80 a year, or £209.65 a month, taken from someone who is very likely not a higher-rate taxpayer at all.

0T: the one people confuse with BR

0T also gives you no personal allowance, but unlike BR it applies the normal bands. That makes it identical to BR on a modest salary and much more expensive on a large one.

On £35,000 the two are within £2 of each other — £7,000 against £6,998.20 — because all the income falls in the basic rate band either way. On £60,000 they diverge sharply: BR takes £12,000, while 0T takes £16,456.40, because the first £37,700 is at 20% and the rest at 40%. If you have started a new job without a P45 and see 0T, that is why the first payslip looked so thin.

K codes: when the number goes negative

A K code means your deductions exceed your allowance, so instead of subtracting a tax-free amount your employer adds an amount to your taxable pay. It usually appears when you have a company car or medical insurance worth more than your personal allowance, or when HMRC is collecting tax you underpaid in an earlier year.

The arithmetic mirrors a normal code: K475 adds £4,759 to your taxable pay for the year. On a £35,000 salary that lifts the income tax from £4,486 to about £8,364.

There is one protection worth knowing. The 50% regulatory limit means PAYE cannot take more than half of your gross pay in any pay period, however large the K code is. Anything that cannot be collected rolls forward rather than leaving you with nothing.

Emergency codes and the W1/M1/X marker

An emergency code looks like 1257L W1, 1257L M1 or 1257L X. The allowance is right; what changes is that the code is non-cumulative.

Normally PAYE is cumulative: each payday your employer looks at your total pay and total tax for the year so far, so any over- or under-payment self-corrects. A non-cumulative code ignores everything before this pay period and treats each month in isolation — one twelfth of the allowance, one twelfth of each band. You get taxed correctly for the month but you do not get back anything overpaid earlier, and you will not benefit from unused allowance from months you were not working.

Emergency codes are common when you start a job without a P45. They usually resolve themselves once HMRC receives your details and issues a cumulative code, at which point any overpayment comes back in your next payslip.

How to check your code

Your payslip shows the code currently being applied — this is the one that matters.
Your Personal Tax Account on GOV.UK, or the HMRC app, shows the code HMRC has issued and, crucially, the breakdown of how it was calculated.
A P2 coding notice arrives by post or in your account whenever your code changes, itemising every addition and deduction.
Your P60 at the end of the year, or a P45 when you leave a job.

The breakdown is the part worth reading. It is where you find the £1,200 of medical insurance from a job you left in 2023, or an estimate of untaxed interest that no longer reflects your savings.

How to get a wrong code corrected

You cannot ask your employer to change it — they are legally required to apply whatever code HMRC issues. The change has to come from HMRC, and you can request it through your Personal Tax Account, the HMRC app, or the income tax helpline. Updating the estimate of your income or removing a benefit you no longer receive is usually enough.

If you have overpaid within the current tax year, a corrected cumulative code will refund it automatically through payroll, often in a single payslip. If the year has already ended, HMRC reconciles it after 5 April and issues a P800 with a refund. You can reclaim overpaid tax for up to four earlier tax years.

The £100,000 trap and your code

Above £100,000 your personal allowance drops by £1 for every £2 of income, disappearing entirely at £125,140. HMRC reflects this in your code, which is why high earners often see a T code or a K code. Because you lose allowance as you earn, the effective marginal rate between £100,000 and £125,140 is 60% in England, Wales and Northern Ireland — and around 67.5% in Scotland, where the advanced rate is 45%.

If your income moves across that threshold mid-year, your code will change, sometimes more than once. It is worth checking the estimate HMRC is working from rather than waiting for the reconciliation.

Try it on your own figures

Our salary calculator accepts a tax code in the advanced inputs, so you can put in the code from your payslip and see what it does against the standard one. If the result does not match what you are actually paid, that gap is worth a call to HMRC.

Scottish taxpayers should use the Scottish tax calculator, which applies the six Scottish bands. For the bands themselves, see UK Tax Bands 2026/27 Explained.