PAYE Tax Code: Numbers, Letters, and Fixing Errors

Your PAYE tax code is a short string of numbers and a letter that tells your employer how much of your pay to leave untaxed and which rules to apply to the rest. The meaning of the letters and numbers in a PAYE tax code is straightforward once you break it apart: the number is your tax-free Personal Allowance for the year with the final digit removed, and the letter signals your situation, such as a standard allowance, a second job, or a transfer to a spouse. The most common code for 2026/27 is 1257L, which reflects the standard £12,570 Personal Allowance.1GOV.UK. Income Tax Rates and Personal Allowances

You can find your code on any recent payslip, on your P60 at the end of the tax year, or on the P45 from a job you’ve left.2GOV.UK. Your P45, P60 and P11D Form It also appears in your personal tax account on GOV.UK and in the HMRC app, which is the easiest place to check when you have more than one job or pension, because each income source has its own code.3GOV.UK. Personal Tax Account

What the Number Means

The number is your tax-free income for the year with the last digit dropped. A £12,570 allowance becomes 1257. Your employer’s payroll software spreads that allowance across each pay period, so if you’re paid monthly, roughly £1,047 of each payslip is tax-free before the rest is taxed at the appropriate rate.

When your allowance shrinks, the number falls. Someone with a company car worth £5,000 in taxable benefit has their allowance cut to £7,570, and the code shows 757. Earnings above £100,000 taper the allowance itself: you lose £1 of allowance for every £2 earned above the threshold, and once you reach £125,140 the allowance is gone completely. The code number reflects wherever your personal figure lands.

What the Letters Mean

The letter attached to the number tells your employer which set of rules to apply.4GOV.UK. Tax Codes – What Your Tax Code Means The main ones:

  • L — Standard Personal Allowance. The default for most employees, giving the familiar 1257L.
  • BR — Every penny of income from this job or pension is taxed at the basic rate of 20%. Usually applied to a second job where your allowance is already used elsewhere.
  • D0 — All income from this source is taxed at the higher rate of 40%. Also typically a second income.5GOV.UK. Understanding Your Employees’ Tax Codes – What the Letters Mean
  • D1 — All income from this source is taxed at the additional rate of 45%.
  • 0T — No Personal Allowance is applied, either because you’ve used it up or because your employer doesn’t yet have enough information to code you properly.
  • K — Your taxable benefits or unpaid tax from earlier years exceed your allowance, so instead of subtracting an allowance, extra income is added to your taxable pay.
  • T — Your calculation includes items HMRC needs to review, so the code is held for manual attention.
  • M — You’ve received 10% of your spouse or civil partner’s Personal Allowance through Marriage Allowance.
  • N — You’ve transferred 10% of your allowance to your spouse or civil partner.
  • NT — No tax is deducted at all. Rare, and reserved for specific situations such as some double taxation agreements or bankruptcy orders.6HM Revenue & Customs. PAYE Manual – Coding: Cases Where You Should Use Code NT

Marriage Allowance changes both partners’ codes at once. If you transfer £1,260, your code number drops by 126 and your partner’s rises by 126, with N on your code and M on theirs.

Scottish and Welsh Prefixes

If your main home is in Scotland, your code starts with S. Scottish taxpayers pay income tax at rates set by the Scottish Parliament, and for 2026/27 those run across six bands from a 19% starter rate to a 48% top rate, against the three bands used in England and Northern Ireland.7Scottish Government. Scottish Income Tax 2026 to 2027 – Technical Factsheet A Scottish employee on the standard allowance sees S1257L rather than 1257L.

If your main home is in Wales, the code starts with C. Welsh rates currently mirror England’s, but the prefix keeps the payroll ready for any future divergence.8HM Revenue & Customs. PAYE Manual – Coding: Scottish Income Tax / Welsh Income Tax If you move between the nations, check the prefix updates, because the wrong one taxes you under the wrong rate structure entirely.

Emergency Code Suffixes

Some codes carry an extra marker at the end that changes how the calculation runs. These are emergency codes, most often triggered by starting a new job without handing over a P45. Instead of working from your cumulative earnings for the year, the calculation looks at each pay period in isolation, as if you’ll earn that same amount every period for the whole year.9GOV.UK. Tax Codes – Emergency Tax Codes The result is usually an overpayment in your first few payslips.

  • W1 — Non-cumulative calculation applied weekly.
  • M1 — Non-cumulative calculation applied monthly.
  • X — Used when pay dates vary.

Some payslips print “NONCUM” instead, but the effect is the same. Once your employer’s payroll submissions reach HMRC, the emergency code is usually corrected within 35 days.

What Changes Your Code

HMRC changes your code whenever your tax-free amount needs to move up or down. Common reasons:

  • Company benefits such as a company car or private medical insurance, which reduce your allowance because their value counts as income you haven’t yet paid tax on.
  • Multiple jobs or pensions, where your full allowance sits with one source and the others get BR, D0, or D1.
  • Untaxed income, such as savings interest above your savings allowance, rental income, or taxable state benefits, collected through a lower code rather than a separate bill.
  • Previous underpayments, spread across the current year’s payslips by cutting your allowance.
  • Marriage Allowance transfers.
  • Income above £100,000, which tapers the allowance.

Mid-year changes don’t always reach HMRC’s records quickly. If a benefit starts in October but only shows up in HMRC’s system the following April, the adjustment lands as a back-dated squeeze on your take-home pay the following year.

If the Code Looks Wrong

Check your code through HMRC’s “Check your Income Tax” service, signed in with Government Gateway or GOV.UK One Login. You’ll see the current code for each employment and pension along with the breakdown behind it, and you can update your estimated income or report new benefits from the same screen.10GOV.UK. Check Your Income Tax for the Current Year

When HMRC issues a new code, it reaches your employer within 15 working days. Monthly-paid employees should see the change on the next payslip or the one after; weekly-paid employees within three pay periods.11GOV.UK. Tax Codes – If You Think Your Tax Code Is Wrong If you can’t use the online service, call the Income Tax helpline, but wait at least 35 days after starting a new job before calling, because that’s how long it takes for your employer’s payroll data to reach HMRC. Once your code changes, you’ll get a P2 Coding Notice explaining the new calculation.12HM Revenue & Customs. PAYE Manual – PAYE11030 – Coding: P2 Notice of Coding

A code that’s too high means you overpay all year and wait for a refund. A code that’s too low leaves you facing a bill later, usually collected by reducing next year’s code if the underpayment is £3,000 or less. Either way, catching the error early is cheaper than letting it run.