UK tax codes explained

Your tax code is the short string — usually something like 1257L— that your employer’s payroll uses to work out how much Income Tax to take from each payslip. It is set by HMRC, not your employer, and a wrong code is one of the most common reasons take-home pay looks too low (or suspiciously high). This guide decodes what the letters and numbers mean for the 2025/26 tax year.

What the numbers mean

The digits in a tax code are simply your tax-free Personal Allowance for the year with the final zero removed. The standard 2025/26 code is 1257L because the standard Personal Allowance is £12,570— drop the last digit and you get 1257. Payroll spreads that allowance evenly across the year, so on a monthly salary you get roughly one-twelfth of £12,570 tax-free each month before any tax is charged.

What the letter means

The letter describes your situation. The ones you are most likely to see:

• L— you get the standard tax-free Personal Allowance. The everyday code for most employees.
• M— you have received 10% of your partner’s allowance through the Marriage Allowance; N means you have given 10% of yours away.
• BR — all income from this job is taxed at the basic rate (20%) with no allowance. Normal for a second job, where your allowance is already used by your main one.
• D0 and D1— all income taxed at the higher (40%) or additional (45%) rate respectively; again typical for a second income.
• 0T— no Personal Allowance is applied, often because HMRC lacks the details to give you one yet (e.g. a new job with no P45).
• NT— no tax is taken at all (rare; specific circumstances).

K codes: when deductions exceed your allowance

A code that starts with Kworks in reverse. It means you have income that cannot be taxed another way — commonly a taxable benefit like a company car or medical insurance, or tax owed from a previous year — that is larger than your tax-free allowance. Instead of subtracting an allowance, payroll adds the K amount to your taxable pay. There is a safeguard: a K code can never take more than half of your gross pay in a single period.

Emergency tax: W1, M1 and X

If your code ends in W1 (week 1), M1 (month 1) or X, you are on an emergency code. These are non-cumulative: each pay period is taxed in isolation, ignoring what you have earned and paid so far this year. It is common when you start a new job before HMRC has your full details. Emergency codes often over-deduct — the good news is that once HMRC issues your correct cumulative code, any overpayment is usually refunded automatically through your next payslip.

Why your code might be wrong

HMRC sets codes from the information it holds, which can lag real life. Codes commonly go wrong after you change jobs, hold two jobs at once, start or stop a taxable benefit, repay tax from an earlier year, or when an estimate of untaxed income is too high or too low. The symptom is take-home pay that does not match a calculator’s estimate for your salary.

How to check and fix it

Your code appears on every payslip, on your P45/P60, and in your HMRC Personal Tax Account online. To sanity-check it, work out what your take-home should be on a standard 1257L code using the UK take-home pay calculator — for example the £35,000 breakdown shows the tax a standard code produces. If your payslip differs and you cannot explain it from a benefit or second job, contact HMRC to have the code reviewed; corrections (and any refund) flow through payroll automatically.

For the bands and rates those codes feed into, read how UK Income Tax & National Insurance work. Figures here are for 2025/26; your own circumstances may change which code applies.