If you are employed in the UK, you have probably seen a tax code on your payslip. It may look like 1257L, BR, D0, 0T or K.
So, what does your tax code mean, and why is it important?
Your tax code tells your employer or pension provider how much Income Tax to deduct from your pay through PAYE. HMRC normally works out your tax code based on your income, Personal Allowance, taxable benefits and other information it holds about you.
Understanding your tax code can help you spot mistakes and understand why the amount of tax deducted from your salary may have changed.
What Is a UK Tax Code?
A UK tax code is a combination of numbers and letters used by HMRC to tell your employer or pension provider how much tax to deduct from your income.
For the 2026/27 tax year, the standard Personal Allowance is £12,570. This is the amount most people can earn before they start paying Income Tax, although there are exceptions depending on individual circumstances.
The numbers and letters in a tax code each have a purpose.
For example, in 1257L, the number 1257 broadly represents a tax-free amount of £12,570, while the letter L indicates entitlement to the standard Personal Allowance.
Common UK Tax Codes Explained
There are several tax codes you may come across on a payslip. Here are some of the most common ones.
1257L – Standard Tax Code
1257L is the standard tax code for most people who have one job or pension and are entitled to the standard Personal Allowance.
The L indicates that the individual is entitled to the standard Personal Allowance.
BR – Basic Rate
BR stands for Basic Rate.
If you have a BR tax code, all income from that particular job or pension is generally taxed at the basic rate.
This can commonly happen when you have more than one job or pension and your Personal Allowance is being used against another source of income.
D0 – Higher Rate
D0 means that all income from that particular job or pension is generally taxed at the higher rate.
It can be used where an individual’s Personal Allowance is being used against another source of income.
D1 – Additional Rate
D1 means that all income from that particular job or pension is generally taxed at the additional rate.
Like BR and D0, this type of code can be used where the individual’s Personal Allowance is allocated elsewhere.
0T – No Personal Allowance
A 0T tax code generally means that there is no Personal Allowance available against that particular employment or pension.
This can happen when your Personal Allowance has already been used or when your employer does not have enough information to give you the correct allowance.
K Tax Codes
A K tax code is used when the taxable income or benefits included in your tax code are greater than your available Personal Allowance.
This can happen in situations such as receiving certain taxable benefits or having tax that needs to be collected through PAYE.
K codes work differently from ordinary tax codes. You should not simply multiply the number in a K code by 10 to calculate a tax-free amount.
Scottish Tax Codes
If you are a Scottish taxpayer, your tax code normally starts with S.
For example:
- S1257L – standard Scottish tax code
- SBR – Scottish basic rate
- SD0 – Scottish intermediate rate
- SD1 – Scottish higher rate
- SD2 – Scottish advanced rate
- SD3 – Scottish top rate
- S0T – no Personal Allowance available
The S tells your employer that Scottish Income Tax rates should be applied.
Welsh Tax Codes
Welsh taxpayers normally have a C at the beginning of their tax code.
Examples include:
- C1257L – standard Welsh tax code
- CBR – Welsh basic rate
- CD0 – Welsh higher rate
- CD1 – Welsh additional rate
- C0T – no Personal Allowance available
The C indicates that Welsh Income Tax rates apply.
Marriage Allowance Tax Codes
You may also come across M or N in a tax code.
M Tax Code
An M code generally means that you have received 10% of your spouse or civil partner’s Personal Allowance through Marriage Allowance.
N Tax Code
An N code generally means that you have transferred 10% of your Personal Allowance to your spouse or civil partner.
NT Tax Code
NT means that no Income Tax is being deducted from that particular income.
HMRC uses NT codes only in certain circumstances where the income qualifies for this treatment.
T Tax Code
A T tax code means HMRC has used other calculations when working out your Personal Allowance.
It may be used where HMRC needs to take additional information into account rather than simply applying the standard allowance.
Emergency Tax Codes
When you start a new job, your employer may not always have all the information needed to apply your correct tax code immediately.
In this situation, you may temporarily receive an emergency tax code such as:
- 1257L W1
- 1257L M1
- 1257L X
The W1, M1 or X indicates that your tax is being calculated on a non-cumulative basis.
An emergency tax code does not necessarily mean that something has gone wrong. It can be temporary while HMRC and your employer update your records.
Quick Guide to UK Tax Code Letters
| Tax Code | General Meaning |
| L | Standard Personal Allowance |
| M | Received 10% of partner’s Personal Allowance |
| N | Transferred 10% of Personal Allowance to partner |
| K | Taxable income or benefits exceed available Personal Allowance |
| BR | Basic rate applied to that income |
| D0 | Higher rate applied to that income |
| D1 | Additional rate applied to that income |
| 0T | No Personal Allowance available |
| NT | No Income Tax deducted |
| T | Other calculations used to determine Personal Allowance |
| S | Scottish tax rates apply |
| C | Welsh tax rates apply |
The exact meaning and tax treatment depend on your circumstances and the tax code issued by HMRC.
Why Can Your Tax Code Change?
It is quite normal for a tax code to change during the tax year.
HMRC may update your tax code if:
- your salary changes
- you start or leave a job
- you have another job or pension
- you receive taxable employee benefits
- your Personal Allowance changes
- you have underpaid or overpaid tax
- you start receiving a State Pension
- information about your circumstances changes
When HMRC changes your tax code, it normally sends the updated information to your employer or pension provider.
What If Your Tax Code Is Wrong?
If your tax code looks different from what you expected, don’t simply ignore it.
First, check the tax code on your payslip and compare it with the information held by HMRC. You can use your HMRC online account to check your tax code and the information used to calculate it.
If something is incorrect, such as your employment details, income or taxable benefits, you may need to update HMRC.
A wrong tax code can result in too much or too little Income Tax being deducted from your pay.
Frequently Asked Questions About UK Tax Codes
1. What is the most common tax code in the UK?
For the 2026/27 tax year, 1257L is the standard tax code for most people receiving the standard Personal Allowance.
2. What does 1257L mean?
The 1257 generally represents a Personal Allowance of £12,570, while the L indicates entitlement to the standard Personal Allowance.
3. What does BR mean on my payslip?
BR means that income from that particular job or pension is generally taxed at the basic rate. It is often used where someone has another job or pension using their Personal Allowance.
4. What does 0T mean?
A 0T code generally means that no Personal Allowance is available against that particular source of income.
5. What does a K tax code mean?
A K code is generally used where taxable income or benefits included in your tax code are greater than your available Personal Allowance.
6. Can my tax code change during the year?
Yes. HMRC can change your tax code when your income, employment, pension, benefits or other circumstances change.
Final Thoughts
UK tax codes can look complicated when you first see them on a payslip, but understanding the basic numbers and letters makes them much easier to follow.
Codes such as 1257L, BR, D0, D1, 0T and K are used in different circumstances, while prefixes such as S and C indicate Scottish and Welsh tax treatment.
If your tax code has recently changed or you are unsure whether the correct amount of tax is being deducted, checking your HMRC records is a good place to start.
Note: Tax codes and tax rules can change. This article is intended as general information and is based on UK tax rules applicable to the 2026/27 tax year. For advice relating to your individual circumstances, speak to HMRC or a qualified tax professional.
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