Tax codes explained: what your code means

Your tax code is a short string of numbers and letters that tells your employer or pension provider how much tax-free pay to give you and which rates to use. Getting it right matters: a wrong code is one of the most common reasons people pay too much, or too little, tax. This guide explains how to read any code and what to do if yours looks wrong.

Where to find your tax code

You can find your current code on your payslip, in the HMRC app, in your personal tax account, or on a tax code notice letter from HMRC. GOV.UK’s guide to tax codes explains each of these. You get a separate code for each job or pension you have, so if you have two jobs you’ll have two codes.

For most people with one job, the code for the current year is 1257L. If you live in Scotland it’s S1257L, and in Wales it’s C1257L.

What the numbers mean

The number in your code is your tax-free allowance for that job, divided by ten. HMRC starts with your Personal Allowance, which is £12,570 for most people, then:

• takes off anything it needs to collect tax on through your pay, such as company benefits like private medical insurance, untaxed income, or tax you owe from an earlier year;
• adds anything that increases your allowance, such as job expenses you claim tax relief on, or Marriage Allowance you receive.

The result is rounded down and the last digit is replaced by a letter. For example, if a company benefit worth £1,500 reduced your allowance, your tax-free amount would be £12,570 minus £1,500, and your code would become 1107L.

Your employer spreads that tax-free amount across the year. If you’re paid monthly, you get one-twelfth of it each month before tax starts.

What the letters mean

The letter at the end tells your employer how to treat the number:

Letter	What it means
L	You get the standard tax-free Personal Allowance.
M	You receive part of your partner’s allowance through Marriage Allowance.
N	You’ve transferred part of your allowance to your partner through Marriage Allowance.
T	Your code includes other calculations, for example because HMRC needs to review items in it.
K	The amounts HMRC is collecting are more than your allowance, so an amount is added to your pay before tax.

You can try any code in our take-home pay calculator by opening the tax code field. It works out your pay with the allowance and rates your code implies.

Codes without a number

Some codes have no allowance at all. They’re most often used for a second job or pension, where your allowance is already used by your main job:

• BR: all your pay from this job is taxed at the basic rate of 20%.
• D0: all your pay is taxed at the higher rate of 40%.
• D1: all your pay is taxed at the additional rate of 45%.
• 0T: no allowance, so all your pay is taxed in the usual bands. This is common when you start a job and your employer doesn’t have your details yet.
• NT: no tax is taken from this income at all.

If you have more than one job, see our guide to paying tax on two jobs for how the allowance is usually split.

S and C prefixes

A letter at the start of your code tells your employer which country’s rates to use:

• S means you’re a Scottish taxpayer. Your pay is taxed using the Scottish income tax bands, which have more rates than the rest of the UK. Scottish versions of the no-number codes run from SBR to SD3.
• C means you’re a Welsh taxpayer. Welsh rates are currently the same as in England and Northern Ireland, so a C code doesn’t change your take-home pay, but the tax is allocated to Wales.

There’s no prefix for England or Northern Ireland.

How K codes work

A K code means the deductions in your code are larger than your allowance. Instead of getting tax-free pay, an amount is added to your taxable pay. This can happen if you have a company car, owe tax from an earlier year, or get taxable state benefits that can’t be taxed directly.

To protect your income, your employer can’t take more than 50% of your pay before tax in any pay period when using a K code. Any tax that can’t be collected because of the limit is dealt with later.

Emergency codes: W1, M1 and X

If your code ends in W1, M1 or X, or your payslip says NONCUM, you’re on an emergency basis. Your tax is worked out on each payday’s pay alone, rather than on your total pay so far in the tax year. This is often temporary when you start a job, but it can mean you pay the wrong amount for a while. Our guide to emergency tax codes explains why it happens and how to fix it.

How to check your code is right

Your code is only as good as the information HMRC has. It’s worth checking it whenever something changes, such as a new job, a pay rise that takes you into a new band, a company car or a new pension. To check:

1. Sign in to HMRC’s Check your Income Tax service or the HMRC app.
2. Look at the employment and pension details, your estimated income for the year, and any benefits or expenses listed.
3. Update anything that’s wrong or missing, such as a job you’ve left or an expense you can claim.

If HMRC changes your code, it tells you and your employer. If you’re paid monthly, the new code should usually appear on your next or following payslip. If your payslip still shows the old code, ask your payroll team whether they’ve received it.

If you’ve paid the wrong amount

When your code is corrected part way through the year, your employer uses the new code in its running total for the year. If you’ve overpaid, the refund normally comes back through your pay. If you’ve underpaid, HMRC usually collects it by adjusting your code for a later year. After the year ends, HMRC checks your records and may send a tax calculation letter. Our guide to claiming a tax refund covers what to do next.

To see what a corrected code would mean for your pay, enter it in the take-home pay calculator and compare it with your payslip. If you have two jobs, the two jobs tax calculator shows how each code affects each job.