What does the number in my tax code mean?
Most codes are a number and a letter. The number, multiplied by ten, is the tax-free amount for the year. So 1257L means £12,570 tax-free, and 1100L means £11,000. A lower number usually means HMRC is collecting something through your pay, such as tax on a company benefit or tax owed from an earlier year.
On £30,000, the standard code means £3,486.00 income tax. With 1100L it would be £3,800.00: £314.00 more, because £1,570 less of your pay is tax-free.
What do the letters in my tax code mean?
- L: you get the standard tax-free Personal Allowance.
- M: Marriage Allowance: you have received 10% of your partner’s allowance.
- N: Marriage Allowance: you have transferred 10% of your allowance to your partner.
- T: your code includes other calculations to work out your allowance.
- 0T: no tax-free amount; the normal bands apply from the first pound.
- BR: all pay taxed at the basic rate, 20%. Common on a second job.
- D0: all pay at the higher rate, 40%. D1: all pay at the additional rate, 45%.
- NT: no tax taken at all, for some special cases.
On a second job paying £12,000 with BR, the tax is a flat £2,400.00, because the allowance is used up elsewhere.
How does a company benefit change my code?
Say your employer gives you private medical cover worth £2,000 a year. Instead of sending you a tax bill, HMRC takes £2,000 off your tax-free amount, so 1257L becomes 1057L. On £45,000 that raises your income tax from £6,486.00 to £6,886.00: £400.00 a year, which is 20% of the benefit, collected a little each payday.
Why does my second job have a D0 code?
If your main job already takes you into the 40% band, HMRC may give a second job the code D0, so its pay is taxed at 40% from the first pound. A second job paying £10,000 on D0 has £4,000.00 of income tax taken, which is right if all of that pay would have fallen in your higher rate band anyway.
What do S and C at the front mean?
An S means you pay Scottish income tax, with its six bands. A C means you live in Wales; for 2026/27 the Welsh rates are the same as England’s, but HMRC still tracks them separately. Scottish codes have extra flat-rate versions: SBR (20%), SD0 (21%), SD1 (42%), SD2 (45%) and SD3 (48%).
What is a K tax code?
A K code means your deductions are bigger than your allowance, so instead of tax-free pay you get extra taxable pay. K300 adds £3,000 to your pay for tax. On £30,000 that makes the tax £6,600.00, against £3,486.00 on the standard code.
There is a safety limit: tax through payroll can never be more than half of your pay in a pay period. On a low wage with a large K code, such as £8,000 a year on K3000, the tax is capped at £4,000.00, half the pay, and the rest is collected later.
What are emergency tax codes (W1, M1 and X)?
If your employer does not have the right details yet, for example when you start a job without a P45, you may get an emergency code such as 1257L M1. It still gives the standard allowance, but each payday is worked out on its own instead of being added up over the year.
With steady pay that makes no difference. With uneven pay it can. On £36,000 with a £6,000 bonus paid in one month, 1257L M1 takes £6,848.17 over the year, while the tax actually owed is £5,886.00. The £962.17 difference comes back once HMRC sends a normal code, or after the year ends.
How do I check my tax code?
Compare your code with what you expect: 1257L if you have one job and no benefits. Then try it in the calculator, which accepts every code above, or check one month in the payslip checker. If something looks wrong, HMRC is the only one who can change it.