Your tax code tells your employer how much tax to deduct from your pay. The wrong tax code means overpaying or underpaying tax — here’s how to understand and check yours.
Your tax code might look like a random combination of numbers and letters on your payslip, but it contains precise instructions about how much tax-free income you are entitled to. Getting it wrong — and HMRC makes errors more often than you might expect — means you either pay too much tax or build up a debt to HMRC that gets collected later.
A tax code is a set of numbers and letters that HMRC sends to your employer, telling them how much of your income should be tax-free before they start deducting tax. Your employer uses it to calculate your PAYE (Pay As You Earn) deductions each pay period.
The number in the code typically represents your tax-free income, divided by 10. So the code 1257 means £12,570 of tax-free income (£12,570 ÷ 10 = 1257). The letter modifies how that allowance is applied.
The most common tax code in 2026/27 is 1257L. This is the standard code for most employees who have one job, are not claiming any additional allowances, and do not have any deductions reducing their allowance.
It means:
If your payslip shows 1257L, your employer is deducting tax correctly based on the standard personal allowance. You pay no tax on the first £1,047.50 of earnings each month, and 20% on everything above that up to the higher rate threshold.
Full personal allowance of £12,570. Most employees will have this code.
All income taxed at 20%. Used for second jobs or pensions where the personal allowance is used elsewhere.
All income taxed at 40%. Used when all income from this source should be taxed at higher rate.
All income taxed at 45%. Used for additional rate taxpayers with multiple income sources.
No tax deducted at all. Used in specific circumstances such as certain pension drawdown arrangements.
No personal allowance — all income taxed at the appropriate rate. Often used when starting a new job without a P45.
A K prefix (e.g. K500) means you owe tax on benefits or income not included in PAYE. Extra tax is deducted.
An S before the code (e.g. S1257L) means Scottish income tax rates apply to your earnings.
A C before the code means Welsh rates apply. Currently the same as England but may differ in future.
M means you’ve received transferred allowance. N means you’ve transferred allowance to your partner.
If HMRC does not have enough information about your income, your employer may use an emergency tax code. These are applied when:
Emergency tax codes in 2026/27 are typically 1257L W1, 1257L M1 or 1257L X. The W1 (week 1) or M1 (month 1) suffix means your tax is calculated on a non-cumulative basis — only for that pay period, without reference to what you’ve already earned or paid in the year.
Your tax code could be wrong if:
Your current tax code appears on:
You can also check and update your tax code online through your HMRC personal tax account at gov.uk/check-income-tax. You need a Government Gateway login (or can set one up using your National Insurance number and passport or driving licence).
The personal tax account shows your current code, what it means, and allows you to update your details if anything has changed.
If your tax code is wrong, contact HMRC directly:
Once corrected, your employer receives the updated code and adjusts future deductions accordingly. If you have overpaid tax during the year, HMRC will usually refund it through your payslip within a few pay periods, or by cheque or bank transfer at the end of the tax year.
Check what your take-home should be with the correct 1257L tax code