Tax codes, decoded.
Tax year 2026/27 · updated 6 August 2026
Your tax code is the little string on your payslip that tells your employer how much tax-free pay to give you before the bands start. Most of the time it quietly does its job; when it is wrong, it is usually the reason a payslip surprises you. Two parts matter: the number, which is your tax-free allowance divided by ten, and the letters, which say how to apply it.
Reading 1257L
1257L is the standard code for 2026/27: 1257 × 10 = £12,570 of allowance, spread evenly across the year, and L meaning no unusual circumstances. Your employer gives you £1,047.50 of tax-free pay each month and taxes the rest through the bands. If HMRC adjusts your allowance, say for untaxed interest, a company benefit or underpaid tax from last year, the number moves and the letter may change.
Every letter, in one table
| Code | What it means |
|---|---|
| 1257L | The standard code: £12,570 of tax-free allowance, the L means nothing else unusual. |
| M / N | Marriage Allowance: M means you receive £1,260 of allowance from your partner (e.g. 1383M), N means you transferred it away (e.g. 1131N). |
| T | HMRC is applying some other adjustment; the number still sets your allowance. |
| K codes | Negative allowance: deductions (usually benefits in kind or owed tax) exceed your allowance, so the number is ADDED to your taxable pay. K497 adds £4,970. |
| BR | Basic rate on everything: 20% with no allowance. Common on second jobs and pensions. |
| D0 / D1 | Higher (40%) or additional (45%) rate on everything, usually a second income already covered by allowance elsewhere. |
| 0T | No allowance, but the normal bands still apply. Often a stopgap when HMRC has no starter information. |
| NT | No tax at all on this income. |
| S / C prefix | Scottish (S1257L) or Welsh (C1257L) rates apply, set by where you live. |
| W1 / M1 / X | Emergency, non-cumulative: each payday is taxed in isolation instead of over the year to date. Usually temporary after a job change. |
K codes: when your allowance goes negative
A K code means your deductions (typically benefits in kind like a company car, or tax owed from an earlier year) are bigger than your allowance. Instead of taking £12,570 off your taxable pay, payroll addsthe code’s number × 10. On a £30,000 salary, code K497 makes £34,970 taxable rather than £17,430, which at basic rate moves your income tax from £3,486 to £6,994 a year. One protection applies: PAYE never deducts more than half of your pay in any period, however big the K number.
Emergency codes after a job change
1257L W1 (weekly) or M1 (monthly) means each payday is taxed on its own rather than cumulatively over the year. You get one period’s worth of allowance each time, so if you started mid-year with unused allowance, you will overpay slightly until HMRC issues the proper cumulative code, and the difference then comes back through payroll.
Check what your code does to your pay
The calculator takes any code, 1257L, K codes, BR, D0, D1, 0T or NT, and shows the exact effect on your take-home, band by band. If you think your code is wrong, check it against GOV.UK’s tax code guide or sign in to your personal tax account; only HMRC can change it.