Personal Tax Code: Numbers, Letters, and How to Check It

Your personal tax code is the short string of numbers and a letter that tells your employer or pension provider how much of your income to treat as tax-free before deducting income tax. For the 2026/27 tax year the standard code is 1257L, which gives you £12,570 of tax-free pay.¹ If the code is wrong, you could be overpaying or underpaying tax month after month without realising. Checking takes a few minutes.

Where to Find Your Tax Code

Your payslip is the quickest place to look. Most payslips print the code near the top, next to your tax and National Insurance deductions. Your P60 shows the code that was in use at the end of the tax year, and a P45 carries the code from an old job to a new one so your next employer can set you up correctly.²

You can also check it online through your personal tax account on GOV.UK or in the HMRC app. The first sign-in asks you to verify your identity, usually with a passport or driving licence. Once you’re in, you can see the current code, any adjustments HMRC has made during the year, and the breakdown behind the calculation.³ A quick look in April or May, when the new tax year starts, is a good habit.

What the Numbers Mean

The number in your code is your tax-free income for the year, with the final digit dropped. HMRC starts with your personal allowance, subtracts anything that reduces it (untaxed income, taxable benefits from your employer), then converts what’s left into the code number.¹ So 1257 means roughly £12,570 of tax-free income, which is the standard allowance for 2026/27.

If you get taxable benefits or have other untaxed income, the number drops. Someone with a company car benefit worth £5,000 a year might see their code fall from 1257 to around 757, leaving about £7,570 of tax-free pay. The lower the number, the less tax-free income your employer applies.

What the Letters Mean

The letter tells your employer which rules to apply. These are the ones you’re most likely to see:

L: you get the standard personal allowance. Most employees have this.
M: you’ve received a Marriage Allowance transfer from your partner, adding 10% of their allowance (£1,260 for 2026/27) to yours.
N: you’ve transferred 10% of your allowance to your partner.
BR: all income from this job or pension is taxed at 20% with no allowance applied. Usually appears on a second job.
D0: all income from this source is taxed at 40%.
D1: all income from this source is taxed at 45%.
K: your untaxed income and benefits are larger than your personal allowance, so instead of a tax-free amount HMRC adds to your taxable pay. The number after K, multiplied by 10, is the amount added.
0T: no personal allowance applied, either because you’ve used it all up or because a new employer doesn’t yet have your details.
NT: no tax deducted from this income.¹

The K code catches people out. If your taxable benefits are worth more than your personal allowance, the code flips from giving you tax-free pay to effectively increasing what you’re taxed on. It isn’t a penalty. HMRC is just collecting tax on the benefits through your regular pay rather than sending you a separate bill.

Emergency Tax Codes

Start a new job without a P45, or before HMRC has enough information, and you’ll be put on an emergency code. You’ll spot it by the suffix W1, M1, or X after the number.¹ These codes tax each pay period in isolation and ignore what you’ve earned or paid so far in the year.

In practice you often overpay. On a normal cumulative code, HMRC spreads your allowance evenly and corrects any over- or under-deductions as the year goes on. An emergency code doesn’t. Start a job in October and you won’t benefit from the unused allowance from April to September until HMRC issues your proper code and your employer recalculates. If the refund doesn’t appear automatically in a later payslip, check your personal tax account.

Scottish and Welsh Prefixes

If your main home is in Scotland, your code starts with S. Scottish income tax rates and bands are set by the Scottish Parliament and include an intermediate rate, an advanced rate, and a top rate on top of the usual bands.¹ So a typical Scottish employee sees S1257L. The personal allowance is the same; the rates applied to income above it are not.

Welsh taxpayers see a C prefix. Welsh rates have so far stayed aligned with England and Northern Ireland, so C1257L currently produces the same deductions as 1257L. The prefix exists because the Welsh Parliament can vary rates in future.⁴ Your employer handles the mechanics once HMRC assigns the right prefix.

Why Your Code Might Not Be 1257L

The most common reason your code differs from the standard is that you receive taxable benefits from your employer. A company car is the classic example, valued by HMRC based on CO2 emissions, fuel type, and how long you have it in the year.⁵ Private medical insurance paid by your employer, interest-free loans, and accommodation work the same way. HMRC assigns a cash value and cuts your tax-free allowance to match.

Most benefits are reported on a P11D after the end of the tax year, though some employers now payroll benefits and deduct the tax in real time instead of adjusting the code.⁶ Either way, check that the benefit values in your code match what you actually get. An old company car you handed back months ago can sit in your code until someone tells HMRC.

Multiple jobs also change things. HMRC splits your allowance so it’s only applied once across your income sources. Your main job normally gets the full allowance (1257L) and a second job gets BR, D0, or D1 with no allowance. If the split is wrong, you’re either overpaying or building up an underpayment for later.

The £100,000 Taper

When your adjusted net income goes above £100,000, your personal allowance starts to shrink. For every £2 above the threshold you lose £1 of allowance, and by £125,140 the allowance is gone entirely.⁷ The effective marginal rate on income in that band is 60%, because you pay 40% on the income itself and simultaneously lose allowance that was sheltering other income at 40%.

HMRC reflects the taper by lowering the number in your code. Someone earning £110,000 loses £5,000 of allowance (half of the £10,000 above the threshold), leaving a code based on £7,570 of tax-free income. If your pay fluctuates, the code can change year to year as HMRC estimates where you’ll land, and a wrong estimate is a common reason for an unexpected bill or refund.

Underpaid Tax Collected Through Your Code

If you underpaid in a previous year and the amount is under £3,000, HMRC usually collects it by lowering your code for the following year rather than asking for a lump sum. The underpayment is spread across twelve months of salary deductions.⁸ That’s why your code can drop even when nothing about your circumstances has changed.

There are limits. HMRC won’t collect through the code if doing so would mean more than 50% of your PAYE income goes on tax, or more than double your normal bill. For amounts of £3,000 or more, HMRC asks you to pay directly. If an underpayment adjustment shows up on your coding notice and you don’t recognise the reason, that’s a signal to look back at last year.

How to Check and Correct Your Code

The fastest fix is through the “Check your Income Tax” service on GOV.UK. Sign into your personal tax account, review your employment details, income estimates, and any benefits or expenses HMRC has on file, and update anything wrong or missing.⁹ The HMRC app does the same job.³

Look out for old benefits still listed, unrealistic estimated income, and the wrong personal allowance being applied. If you started a new job without handing over a P45, give it 35 days for HMRC to receive the new employment details before chasing.⁹ If the online service isn’t an option, HMRC’s income tax helpline can update it for you.

Once HMRC agrees the code needs changing, they update it and notify both you and your employer within 15 working days. You’ll get a coding notice (form P2) breaking down every element, from your allowance to any benefit deductions or underpayment adjustments.⁹ Read it rather than filing it away. Most of the errors that cost people money are visible on the notice.

Getting a Refund if You’ve Overpaid

After the tax year ends, HMRC reviews PAYE records and sends a P800 tax calculation letter to anyone who has paid too much or too little. If you’re owed a refund, the letter explains how to claim online or confirms that a cheque is on the way. Cheques arrive within 14 days of the date on the letter, and refunds for more than one year are combined into a single payment.¹⁰

You don’t have to wait for a P800. If you spot a wrong code mid-year, updating it through the online service can trigger a recalculation and prompt your employer to refund the overpaid tax through your next payslip. People who change jobs, stop receiving a benefit, or shift from full-time to part-time are the ones most likely to be overpaying quietly. A five-minute check each April keeps HMRC from holding money that belongs to you.

1
GOV.UK. Tax Codes – What Your Tax Code Means
2
GOV.UK. Your P45, P60 and P11D Form – P60
3
GOV.UK. Check Your Income Tax for the Current Year
4
GOV.UK. Understanding Your Employees Tax Codes – What the Letters Mean
5
GOV.UK. Calculate Tax on Employees Company Cars
6
GOV.UK. Expenses and Benefits for Employers – Reporting and Paying
7
GOV.UK. Income Tax Rates and Personal Allowances
8
GOV.UK. Pay Your Self Assessment Tax Bill – Through Your Tax Code
9
GOV.UK. Tax Codes – How to Update Your Tax Code
10
GOV.UK. If Your Tax Calculation Letter (P800) Says Youre Due a Refund