Your tax code is made up of numbers and letters. 1257L is the tax code currently used for most people who have one job or pension.
The tax code is there so that through the tax year, unless you are self-employed, you pay approximately the right amount of tax. But it is not always correct.
You can use the HMRC’s tax code checker to find out:
- what the numbers and letters in your tax code mean
- how much tax you will pay
- what you may need to do next
What the numbers mean
The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year.
HMRC works out your individual number based on your tax-free Personal Allowance and income you have not paid tax on (such as untaxed interest or part-time earnings). They also consider the value of any company benefits (such as a company car).
What the letters mean
L You’re entitled to the standard tax-free Personal Allowance
M Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance
N Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner.
T Your tax code includes other calculations to work out your Personal Allowance
OT Your Personal Allowance has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code
BR All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
D0 All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
D1 All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
NT You’re not paying any tax on this income
S our income or pension is taxed using the rates in Scotland
S0T Your Personal Allowance (Scotland) has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code
SBR All your income from this job or pension is taxed at the basic rate in Scotland (usually used if you’ve got more than one job or pension)
SD0 All your income from this job or pension is taxed at the intermediate rate in Scotland (usually used if you’ve got more than one job or pension)
SD1 All your income from this job or pension is taxed at the higher rate in Scotland (usually used if you’ve got more than one job or pension)
SD2 All your income from this job or pension is taxed at the top rate in Scotland (usually used if you’ve got more than one job or pension)
If your tax code has ‘W1’ or ‘M1’ or ‘X’ at the end
These are emergency tax codes.
If your tax code has a ‘K’ at the beginning
Tax codes with ‘K’ at the beginning mean you have income that is not being taxed another way and it’s worth more than your tax-free allowance.
For most people, this happens when you’re:
- paying tax you owe from a previous year through your wages or pension
- getting benefits you need to pay tax on – these can be state benefitsor company benefits
Your employer or pension provider takes the tax due on the income that has not been taxed from your wages or pension – even if another organisation is paying the untaxed income to you.
Employers and pension providers cannot take more than half your pre-tax wages or pension when using a K tax code.
Emergency tax codes
If your tax code ends in ‘W1’ or ‘M1’ or ‘X’ you’re on an emergency tax code. For example:
- 1257L WI
- 1257L MI
- 1257L X
You may be put on an emergency tax code if HMRC does not get your income details in time after a change in circumstances such as:
- a new job
- working for an employer after being self-employed
- getting company benefits or the State Pension
Emergency tax codes are temporary. HMRC will usually update your tax code when you or your employer give them your correct details. If your change in circumstances means you have not paid the right amount of tax, you’ll stay on the emergency tax code until you’ve paid the correct tax for the year.
