Your tax code decides how much of your pay is taxed, and it is wrong more often than people assume. HMRC issues it from information that may be out of date — an old company car, a job you left, an estimate that never got corrected.
Nobody checks it for you. Your employer applies whatever code HMRC sends.
Reading the standard code
The usual code for 2026/2027 is 1257L.
- The number is your tax-free pay divided by ten. 1257 means £12,570 of tax-free pay.
- The letter describes your circumstances.
Strictly, HMRC works your free pay as the code number times ten, plus nine — so 1257L gives £12,579. That is why a payslip calculation can differ by a pound or two from a rough estimate.
The letters
| Letter | Meaning |
|---|---|
| L | The standard Personal Allowance |
| M | You received 10% of your partner’s allowance under Marriage Allowance |
| N | You gave away 10% of yours |
| T | Other calculations apply — often the allowance taper above £100,000 |
| 0T | No allowance at all — every pound taxed |
| BR | All income at basic rate, 20% |
| D0 | All income at higher rate, 40% |
| D1 | All income at additional rate, 45% |
| NT | No tax at all — rare |
| S prefix | Scottish rates apply |
| C prefix | Welsh rates apply |
Second jobs: BR, D0 and 0T
You get one Personal Allowance, not one per job. It is normally applied to your main job, so a second job is usually taxed at BR — every pound at 20%, with no allowance.
That is correct if your main job already uses the whole allowance. It overtaxes you if it does not — for example two part-time jobs of £9,000 each. You can ask HMRC to split the allowance between them.
D0 on a second job means HMRC expects your combined income in the higher-rate band.
Emergency codes, and why they cost you
An emergency code appears as 1257L followed by W1, M1 or X. It usually shows up when you start a job without a P45.
These are non-cumulative. Instead of considering your earnings for the year so far, each pay period is treated in isolation, giving you one month’s allowance regardless of what you earned before. If you had a gap between jobs, you lose the benefit of the unused allowance from those months — often several hundred pounds.
What to do: give your new employer the P45 from your last job, or complete the HMRC starter checklist. Once HMRC issues a cumulative code, the overpayment is refunded through your pay automatically — you do not need to claim it.
K codes: when the number comes first
A code beginning K — K475 rather than 475L — means your untaxed income or benefits exceed your allowance. Rather than tax-free pay, the amount is added to your taxable pay.
Common causes are a company car, taxable benefits, the State Pension, or unpaid tax from an earlier year being collected through the code.
There is a protection worth knowing: a K code can never take more than 50% of your gross pay in tax in any pay period. Anything beyond that is carried forward.
Signs your code is wrong
- You changed jobs and are on W1 or M1 months later
- You have BR on your only job
- Your code fell sharply with no explanation — often a benefit you no longer receive
- You are on 0T but earn under £12,570
- You have an S or C prefix but do not live in Scotland or Wales
- Your take-home dropped noticeably without a pay change
Getting it corrected
- Check your latest coding notice — HMRC lists exactly what makes up the number
- Sign in to your personal tax account on gov.uk to see and update the assumptions
- Remove benefits you no longer receive, and correct estimated income
- HMRC issues a revised code to your employer, usually within days
Your employer cannot change your code on request. They must apply what HMRC sends, so the correction has to come from HMRC.
If you overpaid in an earlier year you can usually reclaim for the past four years. Overpayments in the current year normally correct themselves once a cumulative code is applied.
See what a code means for your pay with the take-home pay calculator, check the deduction on a payslip with our payslip generator, or read our guide to how PAYE is calculated. Your code also appears on your P60 at the end of each year.