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The standard code for one job with no adjustments is 1257L. Check your code in your Personal Tax Account on GOV.UK if it looks wrong: incorrect codes are common after job changes, benefits-in-kind or second incomes, and HMRC (not your employer) is who corrects them. Not tax advice.
What The Tax Code Calculator Works Out
- What it means: a tax code is HMRC's one-line instruction to payroll. The letters say how to apply the allowance: L is the standard allowance, M and N show Marriage Allowance being received or given, T means HMRC is reviewing items, and a W1, M1 or X suffix marks the emergency non-cumulative basis. An S prefix means Scottish rates, C means Welsh.
- Tax-free amount: the digits x 10 plus 9, so 1257L grants GBP 12,579 of allowance spread across the year, about GBP 1,048 a month before tax begins. Codes above 1257 add allowances such as uniform expenses; codes below claw back untaxed income, state pension or benefits-in-kind.
- Special codes: BR taxes everything at 20% (second jobs whose allowance lives elsewhere), D0 and D1 do the same at 40% and 45%, 0T applies the bands with no allowance (the missing-paperwork code) and NT means no tax.
- K codes: the allowance has gone negative because company cars or owed tax exceed it, so K475 adds GBP 4,750 to taxable pay across the year. A cap means no payday loses more than half its pay to the K adjustment.
- Annual gross pay (advanced): enter the pay from this job or pension to see the income tax the code would take over a full year, using England, Wales and Northern Ireland bands (20% to GBP 50,270, 40% to GBP 125,140, 45% above). National Insurance is separate.
- Pension contributions before tax (advanced): salary sacrifice or net pay pension contributions reduce the pay the code is applied to. Auto-enrolment minimum is 5% from the employee.
- Tax and pay per payday (advanced): the annual figures divided by 12 or 52 depending on how you are paid, which is what to check against the payslip.
- Compared with 1257L (advanced): how much more or less tax this code takes than the standard code on the same pay. A large unexplained difference after a job change, a new pension or a P11D is the classic sign of a wrong code.
- Fixing a wrong code: the correction path runs through HMRC via the Personal Tax Account or phone line, never through the employer, who must apply whatever code they are sent. Cumulative codes self-correct across the remaining paydays once fixed, and the year-end P800 catches what the year missed. Not tax advice.
Source and further reading: GOV.UK (HMRC): tax codes.