UK tax codes explained: what the numbers and letters on your payslip mean

Your tax code is the string of numbers and letters on your payslip. Your employer or pension provider uses it to work out how much Income Tax to take. HMRC sets the code, and you get a separate one for each job or pension. A wrong code means you are either overpaying tax or underpaying and facing a later bill — so it is worth checking.

What do the numbers mean?

The number is your tax-free Personal Allowance divided by 10. The standard allowance is £12,570, so the most common code is 1257L. If something is deducted from your allowance — say a £1,570 taxable benefit from your employer — you are left with £11,000 and the code becomes 1100L.

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What do the letters mean?

The letter L means you get the standard Personal Allowance. Code BR taxes all income from that job at the basic rate — usually used for a second job or pension. D0 taxes it all at the higher rate, D1 at the additional rate. Code 0T means your allowance is used up, or a new employer does not yet have your details. The letter K means you have previously untaxed income above your allowance, and the sum is worked out differently. S and C prefixes apply Scottish and Welsh rates, M and N relate to Marriage Allowance, and NT means no tax is taken from that income.

What is an emergency code?

Codes marked W1, M1 or X are temporary emergency codes. They are used when HMRC lacks full information, for example when you change jobs. On such a code tax is worked out only on the current period, ignoring earlier ones, and you may overpay. Once HMRC has your details it usually replaces the code and refunds any overpayment.

How to check and fix your code

You can see your code in your online account on GOV.UK, in the HMRC app, on your payslip, or in a Tax Code Notice letter. If you think it is wrong, tell HMRC through your account or by phone — correcting it is free. Checking matters most after changing jobs, taking a second job, or getting a new benefit. HMRC refunds overpaid tax and bills for underpaid tax, so it is best to catch an error early. Always check the current rates and thresholds on GOV.UK.