What does my tax code mean?
Type the code from your payslip and get a clear explanation, a verdict on whether it looks right, and what to do if it does not.
How to read a tax code
Most codes are a number then a letter. The number times ten is your tax-free Personal Allowance, so 1257L gives £12,570. The letter is a category: L is the standard allowance, M and N are for Marriage Allowance, and T means other adjustments apply.
Letter-only codes work differently. BR taxes everything at 20% with no allowance, 0T uses the normal bands but no allowance, and D0 and D1 tax everything at 40% or 45%. These are normal on a second job, where the second job tax calculator shows the combined position, but on your main job they usually mean your allowance is not being applied and you are overpaying. A K code is the opposite: it adds to your taxable pay to collect tax you owe from elsewhere.
A prefix letter before the number sets which nation's rates apply. S means Scottish rates, so S1257L carries the same £12,570 allowance but the six Scottish bands the Scottish income tax calculator works through. C means Welsh rates, which currently match those in England and Northern Ireland, so the figure does not change. HMRC decides the prefix from where your main home is, not from where you work.
Why a tax code changes
Codes move for ordinary reasons. Starting a taxable benefit such as a company car or private medical cover reduces the allowance, because the tax on the benefit is collected through the code rather than as a separate bill. Claiming Marriage Allowance moves £1,260 of allowance from one partner to the other and changes both codes. Drawing a pension alongside a salary splits the allowance across two payers. An underpayment from an earlier year is often spread across the coming year through the code instead of being demanded as a single payment. HMRC sets out every adjustment in a coding notice, form P2, which you can read in your Personal Tax Account.
Emergency codes
A W1, M1 or X on the end means an emergency, non-cumulative code, common when you start a new job before HMRC has your full details. Each payday is taxed on its own, so allowance built up earlier in the year is not handed back while the code is in force. HMRC usually issues a normal cumulative code within about 35 days of the job starting, and the overpaid tax comes back through your pay. To size the overpayment first, the emergency tax refund estimator compares what an emergency code takes with the tax actually due, and the take-home pay calculator accepts any code so you can test what the corrected one should pay.
Common questions
What does my tax code mean?
A tax code tells your employer how much tax-free pay you get. The number times ten is your allowance, so 1257L means £12,570 tax-free. Letters and letter-only codes (BR, 0T, D0, K) change how the rest is taxed.
What does tax code 1257L mean?
It is the standard code for someone with one job, no taxable benefits and nothing owed from an earlier year. The 1257 stands for a £12,570 tax-free Personal Allowance, spread evenly across the year at about £1,047.50 a month or £241.73 a week. The L simply means you get the standard allowance rather than a transferred or adjusted one.
Is my tax code correct?
For one job with no benefits, 1257L is the standard code and is usually right. Codes like BR or 0T on your main job, or an emergency code, can mean you are overpaying and may be owed a refund. This checker flags which case you are in.
What does a BR tax code mean?
BR stands for basic rate. Every pound of that income is taxed at 20% and no Personal Allowance is applied to it. On a second job or a second pension that is normal, because the allowance is already sitting on your main income. On your only job it is usually wrong and you are almost certainly overpaying.
What is the difference between 0T and BR?
Both give no tax-free allowance, but 0T then applies the normal bands to that income, so part of it can reach 40% or 45%, while BR taxes all of it at a flat 20%. HMRC uses 0T when it has no details at all, for example when a new starter provides no P45 and signs no starter declaration.
What does a K tax code mean?
A K code works in reverse. Instead of giving an allowance it adds an amount to your taxable pay, to collect tax owed on something that is not taxed at source: a company car, medical cover, a state pension, or an underpayment carried forward from an earlier year. K475 adds £4,750 to your taxable pay across the year. Payroll can never take more than half of a pay packet in tax, so a large K code is collected over time rather than all at once.
What do D0 and D1 mean?
D0 taxes all of that income at the higher rate of 40% and D1 at the additional rate of 45%, in both cases with no allowance. They appear on a second job or second pension where your main income already fills the basic-rate band. In Scotland the equivalents run further, with D2 and D3 covering the advanced and top rates.
Why has my tax code changed?
The usual triggers are a new job or a second income, starting or stopping a taxable benefit such as a company car or private medical cover, claiming or cancelling Marriage Allowance, drawing a pension, or HMRC spreading an earlier underpayment across the coming year. HMRC sends a coding notice, form P2, setting out each adjustment, and your employer receives the code separately.
What does W1, M1 or X on the end of my tax code mean?
It marks an emergency, non-cumulative code. Each payday is taxed on its own instead of against your pay for the year to date, so any allowance built up before you started is not given back while the code stays in place. HMRC normally issues a proper cumulative code within about 35 days of a new job starting, and the overpayment is repaid through your pay once it does.
What do the S and C prefixes mean?
S means HMRC treats you as a Scottish taxpayer and applies the Scottish rates and bands, for example S1257L. C means Welsh rates, for example C1257L, though Welsh rates currently match those in England and Northern Ireland, so the C prefix makes no difference to the figure. The prefix follows where your main home is, not where your employer is based.
What do M and N mean on a tax code?
They record Marriage Allowance. N means you have transferred £1,260 of your Personal Allowance to your spouse or civil partner, so your own code drops to 1131N. M means you are receiving it, so your code rises to 1383M. The transfer is worth up to £252 a year to the couple.
How do I check my tax code?
It appears on every payslip, on your P45 and on your P60. To see how HMRC arrived at it, sign in to your Personal Tax Account on gov.uk, where the coding notice lists each allowance and deduction that makes up the number. Type the code above for an explanation of what it does to your pay.
How do I get a tax refund if my code is wrong?
Contact HMRC through your Personal Tax Account or by phone. If you have overpaid, they correct the code and refund the difference, usually through your pay or as a rebate. You do not need to pay a claims company.