UK Tax Codes Explained: Complete Guide for 2025-2026
Everything you need to know about UK tax codes, including what they mean, how to read them, common codes like 1257L, BR, D0, NT, emergency codes, and what to do if your code is wrong.
Your tax code is a combination of numbers and letters that tells your employer how much income tax to deduct from your salary. It appears on your payslip, P60, and communications from HMRC. While tax codes might look confusing, understanding yours is important because an incorrect code can mean you're paying too much or too little tax.
This guide will help you decode your tax code, understand what it means for your take-home pay, and know what to do if something doesn't look right.
How to Read Your Tax Code
Tax codes are made up of numbers and letters. Here's how to break them down:
Indicates special circumstance (S = Scottish taxpayer, C = Welsh taxpayer)
Your personal allowance divided by 10 (£12,570 ÷ 10 = 1257)
Indicates your entitlement (L = basic personal allowance)
The Number (e.g., 1257)
This is your tax-free personal allowance divided by 10. For example, 1257 means you can earn £12,570 per year before paying tax. Your employer divides this by 12 (months) or 52 (weeks) to work out your tax-free amount each pay period.
The Letter (e.g., L, M, N, T, K)
The suffix letter explains what determines your allowance or if there are special circumstances. We'll cover all the common letters below.
The Prefix (e.g., S, C)
Some codes have a letter at the start. S means you pay Scottish income tax, C means you pay Welsh income tax.
Common Tax Codes Explained
Here are the most common tax codes you'll encounter and what they mean:
What it means: You're entitled to the standard personal allowance of £12,570 for 2025-2026.
Who has it: Most employees with one job and no complications like company benefits or underpaid tax from previous years.
What it means: All your income from this job is taxed at the basic rate of 20%, with no personal allowance.
Who has it: Usually people with a second job or pension. Your personal allowance is used against your main income.
What it means: All your income from this job is taxed at the higher rate of 40%, with no personal allowance.
Who has it: Usually second jobs or pensions for higher earners who've already used their personal allowance and basic rate band.
What it means: All your income from this job is taxed at the additional rate of 45%, with no personal allowance.
Who has it: High earners with multiple income sources who've already exceeded £125,140 from other income.
What it means: No income tax is deducted from your pay.
Who has it: Very rare. Usually people who don't pay UK tax (e.g., some foreign diplomats, or people whose total income is below personal allowance but have multiple small jobs).
What it means: You have income that you haven't paid tax on, or you owe tax from a previous year. The number represents the amount that reduces your personal allowance.
Who has it: People with company benefits (car, medical insurance), state pension alongside salary, or tax owed from previous years.
What it means: Your personal allowance has been used up, or HMRC needs more information.
Who has it: People with multiple jobs, high earners who've lost their personal allowance (£100k+ earners), or new employees where HMRC doesn't have full information.
Tax is calculated using the standard tax bands but with no personal allowance deduction.
Tax Code Prefixes: S, C, and More
Some tax codes have a letter at the beginning. These prefixes indicate special circumstances or jurisdictions:
What it means: You pay Scottish income tax rates, which are different from England, Wales and NI.
Examples: S1257L, S0T, SBR, SD0
Scotland has six tax bands (19%, 20%, 21%, 42%, 45%, 48%) compared to the rest of the UK's four bands. Your code has an S if Scotland is your main place of residence.
Learn more about Scottish income tax →What it means: You pay Welsh income tax rates (currently the same as England).
Examples: C1257L, C0T, CBR
Wales has the power to vary income tax rates but currently uses the same rates as England. The C prefix identifies Welsh taxpayers and allows for future rate differences.
Tax Code Suffixes: What the Letters Mean
The letter at the end of your tax code indicates your entitlements or specific circumstances:
You're entitled to the basic personal allowance. This is by far the most common suffix.
Marriage Allowance: You've received a transfer of 10% of your partner's personal allowance (£1,260), increasing your allowance to £13,830.
Marriage Allowance: You've transferred 10% of your personal allowance to your partner, reducing your allowance to £11,310.
Your code includes other calculations to work out your personal allowance (e.g., company benefits, tax owed from previous years).
Emergency tax codes. These are temporary non-cumulative codes. See the emergency tax section below.
Your personal allowance has been used up, or there are other reasons HMRC needs more information.
You have income that's not being taxed another way and it's worth more than your personal allowance.
Emergency Tax Codes
Emergency tax codes are temporary codes used when your employer doesn't have enough information about you (e.g., you've just started a new job and haven't provided a P45).
Emergency codes have these suffixes:
Week 1 basis - for weekly paid employees
Month 1 basis - for monthly paid employees
Non-cumulative - same effect as W1/M1
What "Non-Cumulative" Means
Normal tax codes are cumulative - they consider your income and tax paid so far during the tax year. Emergency codes don't do this. Instead:
- • They divide your annual allowance by 12 (monthly) or 52 (weekly)
- • They only look at that period's earnings, not your year-to-date totals
- • This often means you pay more tax than you should in the first few months
- • Once HMRC updates your code, you'll get a refund of overpaid tax automatically
Example: Emergency Code Impact
Let's say you start a new job in December earning £3,000/month with code 1257L M1:
Taxable: £3,000 - £1,047.50 = £1,952.50
Tax: £1,952.50 × 20% = £390.50/month
But you've only earned £3,000 so far this year (month 1)
Full allowance available: £3,000 - £0 = £3,000
Tax: £0 this month (you're below your allowance)
Difference: £390.50 overpaid this month, which will be refunded when your code is corrected.
Marriage Allowance (M and N Codes)
If you're married or in a civil partnership, you may be able to transfer 10% of your personal allowance to your partner if certain conditions are met. This is called Marriage Allowance.
You've received 10% of your partner's allowance (£1257)
Tax code: 1383M
You've transferred 10% of your allowance to your partner (£1257)
Tax code: 1131N
Who Can Claim Marriage Allowance?
- • You must be married or in a civil partnership
- • The person transferring must earn less than £12,570
- • The person receiving must be a basic rate taxpayer (earning between £12,570 and £50,270)
- • The benefit is worth up to £252 per year (20% of £1257)
Marriage Allowance: Is it Worth It?
Yes, if you qualify! You can save up to £252 per year, and you can backdate your claim for up to four years, potentially receiving over £1,000. Apply through the GOV.UK website or via the HMRC app.
What to Do If Your Tax Code is Wrong
If you think your tax code is incorrect, it's important to get it fixed. An incorrect code could mean you're paying too much or too little tax.
- 1Find your tax code
Check your latest payslip, P60 (end of year certificate), or log into your personal tax account on GOV.UK.
- 2Check it's appropriate for you
Use the information in this guide. Most people should have 1257L (or S1257L/C1257L). If you have multiple jobs, it's normal for second jobs to have BR, D0, or D1.
- 3Verify your circumstances
Make sure HMRC has the right information: correct address, job details, any company benefits (car, medical insurance), state pension if receiving it.
✓ DO contact HMRC
Only HMRC can change your tax code. Contact them via:
- • Personal tax account on GOV.UK (easiest - update online)
- • HMRC app
- • Income Tax helpline: 0300 200 3300
- • Write to HMRC at the address on your PAYE coding notice
✗ DON'T contact your employer
Your employer can't change your tax code. They can only use the code HMRC tells them to use. They can't override it, even if you ask them to.
What Information to Provide
When contacting HMRC, have ready:
- • Your National Insurance number
- • Your employer's name and PAYE reference (on your payslip)
- • Details of what you think is wrong
- • Any relevant documents (P45, P60, P11D for benefits)
- • Evidence of your circumstances (e.g., marriage certificate for Marriage Allowance)
Common Tax Code Scenarios
Expected code: 1257L (or 1257L W1/M1 initially)
When you start your first job, your employer will usually put you on an emergency code (1257L M1 or W1) until they receive confirmation from HMRC. This code will automatically update to 1257L within a few weeks once HMRC processes your starter information.
What to do: Complete your starter checklist form from your employer. If still on emergency code after 6 weeks, contact HMRC.
Expected codes: 1257L (main job) and BR (second job)
Your personal allowance is usually allocated to your main job. Your second job gets a BR code meaning all that income is taxed at 20%. This is correct unless your total income is very low (in which case you could split your allowance).
What to do: This is normal. Only contact HMRC if your combined income is less than £12,570 and you want to split your allowance between jobs.
Expected code: Lower than 1257L (e.g., 1000L or 900T)
If you have a company car, health insurance, or other benefits, their value is added to your income for tax purposes. To collect the tax, HMRC reduces your personal allowance by the benefit value, giving you a lower tax code.
What to do: Check your P11D form (provided by employer) shows the correct benefit values. If your code seems too low, contact HMRC with your P11D.
Expected code: Lower than 1257L or a K code
State pension is taxable but paid gross (without tax deducted). HMRC usually collects the tax on your state pension through your tax code from your salary or private pension. This reduces your code number or can even give you a K code.
What to do: This is normal if the code correctly reflects your state pension amount. Check your code notice from HMRC to see the calculation.
Expected code: 0T or a much lower number
If you earn over £100,000, your personal allowance reduces by £1 for every £2 over £100k. At £125,140 and above, you have no personal allowance, so your code becomes 0T.
What to do: This is correct. Consider pension contributions to reduce your adjusted net income below £100k and reclaim your personal allowance.
Calculate Your Tax with Different Codes
Use our free salary calculator to see how different tax codes affect your take-home pay. Enter your salary and select your tax code to see the exact impact on your monthly income.
Calculate Your Take-Home PayFrequently Asked Questions
Tax codes can change for many reasons: you've started/stopped receiving company benefits, your estimated income has changed, you've claimed Marriage Allowance, you've started receiving state pension, or you owe tax from a previous year. HMRC should send you a "PAYE Coding Notice" (P2) explaining why your code changed.
Yes. If you've overpaid tax during the year (e.g., due to an emergency tax code), HMRC will usually refund it automatically when your tax code is corrected. If you've overpaid in a previous tax year, you can claim back up to four years' worth of overpaid tax.
If you've underpaid tax (usually less than £3,000), HMRC will collect it by adjusting your tax code for the following year. This spreads the repayment over the year. If you've underpaid more than £3,000, you may need to pay it in a lump sum or via self-assessment.
Yes, and this is normal. Usually your main job gets your personal allowance (code 1257L), while second jobs get BR (all taxed at 20%), D0 (all at 40%), or D1 (all at 45%) depending on your total income level. Each job is coded appropriately to collect the right total tax across all your employment.
Week 1 (W1) or Month 1 (M1) means you're on a non-cumulative emergency tax code. Your tax is calculated only on that week or month's pay, without considering your year-to-date income or tax paid. This often results in overpayment which is refunded when your code is corrected to a cumulative code.
Look for W1, M1, or X at the end of your code (e.g., 1257L W1, 1257L M1, or 1257L X). These indicate emergency non-cumulative codes. Also check your payslip for "Week 1/Month 1" in the tax calculation section. If you're on an emergency code for more than a few months, contact HMRC.