Your tax code tells your employer how much tax-free income you get before deductions start. For 2026/27 the standard code is 1257L, which means a Personal Allowance of £12,570.
The number is your tax-free allowance divided by ten. The letters describe your circumstances.
The number
1257L means £12,570 tax-free, spread evenly across the year. On monthly pay that is £1,047.50 a month before any tax is due.
The Personal Allowance is £12,570 for 2026/27 and is frozen until 2030/31.
3 bands above the personal allowance. Each bar starts where that rate begins.
The letters
| Code | Meaning |
|---|---|
| L | Standard Personal Allowance |
| M | You receive 10% of your partner’s allowance under Marriage Allowance |
| N | You have transferred 10% of your allowance to your partner |
| T | HMRC needs to review the code — often used where the allowance is tapered |
| BR | All income from this source taxed at basic rate, no allowance |
| D0 | All income taxed at higher rate |
| D1 | All income taxed at additional rate |
| 0T | No allowance, taxed across the bands |
| NT | No tax deducted |
| K | Deductions exceed your allowance, so income is added rather than removed |
The prefixes
S means Scottish taxpayer — S1257L. Scotland has six income tax bands rather than three, so the same salary produces a different result. See our guide to Scottish income tax.
C means Welsh taxpayer, from Cymru. Wales has the power to set its own rates but has so far kept them the same as England and Northern Ireland, so a C code currently produces the same tax as an equivalent code without it.
Your prefix is set by where you live, not where your employer is based.
Emergency codes: W1, M1 and X
A code ending in W1, M1 or X is non-cumulative. Each pay period is taxed in isolation rather than against your year-to-date position.
Normal PAYE is cumulative: it looks at everything you have earned and paid so far and adjusts. Non-cumulative gives you a twelfth of your allowance each month regardless of history — so if you have unused allowance from earlier in the year, you do not get the benefit of it yet.
Emergency codes are common and usually temporary, typically after starting a job without a P45. Once HMRC issues a cumulative code, any overpayment is normally refunded automatically through your pay.
BR and D0: the second-job codes
If you have two jobs, your allowance is normally applied to one of them. The second gets BR (all basic rate) or D0 (all higher rate) depending on what the first pays.
This is usually correct. The allowance can only be used once, and applying it to both jobs would leave you underpaid on tax and facing a bill.
But if your main job pays less than your Personal Allowance, some of it is being wasted. You can ask HMRC to split the allowance between employers — for example 900L on one job and 357L on the other. That requires contacting HMRC; it does not happen automatically.
K codes
A K code means your untaxed income or benefits exceed your Personal Allowance, so instead of subtracting an allowance, an amount is added to your taxable pay.
Common causes are a company car, medical insurance, or tax owed from a previous year being collected through your code.
There is a protection: no more than 50% of your pre-tax pay from that source can be taken as tax under a K code.
Why yours might be wrong
- Started a job without giving a P45
- Changed jobs mid-year
- Have more than one job or a pension alongside work
- Started or stopped receiving a taxable benefit
- Underpaid tax previously and it is being collected through the code
- HMRC estimated something and the estimate is out of date
The last one is worth emphasising. Codes are often based on HMRC’s forecast of your circumstances. If a company car went back two years ago and nobody told them, you may still be paying for it.
How to check and fix it
Your code appears on your payslip, your P45 and your P60.
Check it against your circumstances in your Personal Tax Account on GOV.UK. You can see what HMRC thinks you earn, what benefits they believe you receive, and how your code was built.
If it is wrong, tell HMRC — through the online account, by phone, or in writing. Your employer cannot change your code without an instruction from HMRC, so asking payroll will not fix it.
Once corrected, overpaid tax is normally refunded automatically through your pay. If the error spans an earlier tax year, you may need to claim a refund separately.
Why our calculator may not match your payslip
Our take-home pay calculator assumes the standard code and a full tax year on a cumulative basis. Real payroll runs cumulatively against your actual code, week by week.
If the figures differ noticeably, the tax code is the first thing to check — then whether you have benefits in kind, a mid-year pay change, or a pension scheme working differently from the type you selected.
Sources
- Tax codes — GOV.UK
- Income Tax rates and Personal Allowances — GOV.UK
- Check your Income Tax for the current year — GOV.UK
Checked against source on 30 August 2026. This is general guidance, not tax advice.
Written by Nathan Cole
I built the calculators on HoursHQ and check every statutory figure against GOV.UK, Acas and the legislation itself before it goes live. Where the law is genuinely unclear, I say so rather than guessing.