Tax Codes Explained: What 1257L and Other Codes Mean

Your tax code tells your employer or pension provider how much tax-free pay to give you before taking income tax. For 2026/27 the standard tax code is 1257L, which reflects the £12,570 personal allowance. The number is your tax-free allowance divided by ten, and the letter shows your circumstances.

This guide explains the most common tax codes, how to read yours, why HMRC changes them and what to do if yours looks wrong. If you want to estimate your take-home pay, try our take-home pay calculator and our tax code checker.

What does 1257L mean?

The digits 1257 come from the personal allowance of £12,570. HMRC drops the final digit and adds a letter. A code of 1257L therefore means you can earn £12,570 before paying income tax. Everything above that is taxed at 20%, 40% or 45% depending on your income. The personal allowance has been frozen at £12,570 since 2021.

Common tax code letters

How tax codes are worked out

HMRC starts with your personal allowance and then adjusts it for anything that changes how much tax you should pay through your wages. Items that reduce your allowance include taxable benefits in kind, such as a company car or medical insurance, and unpaid tax from an earlier year collected through your code. Items that increase it include the Marriage Allowance and certain expenses.

Example: a standard code

Allowance £12,570 divided by ten gives 1257, and with the L suffix the code is 1257L.

Example: Marriage Allowance

A spouse who receives the Marriage Allowance has an allowance of £12,570 plus £1,260, which is £13,830. Divided by ten that is 1383M. The spouse who transfers the allowance has £11,310, giving 1131N.

Example: a K code

If you receive £4,750 of taxable benefits and other deductions that exceed your allowance, you could have a code of K475. This means £4,750 is added to your pay before tax is calculated.

Why your tax code might change

• You started a new job or took a second job.
• You receive a company car, private medical insurance or another benefit.
• HMRC is collecting underpaid tax from a previous year.
• You have started drawing a pension.
• You claimed or stopped claiming the Marriage Allowance.
• Your estimated income changed, for example through savings interest.

Emergency tax codes

If HMRC does not have the details it needs, it may issue an emergency code that ends in W1 or M1, such as 1257L W1. This means tax is calculated on that pay period alone rather than cumulatively. You may overpay in the short term, but the correct code should fix this and any overpayment is normally refunded through payroll.

How to check your tax code

1. Look at your payslip, where the code appears near the top.
2. Check your HMRC personal tax account, which shows your tax code and the information used.
3. Compare it with your circumstances: benefits, other jobs, pension and any allowances you claim.
4. Use our tax code checker to see what your code should be.

What to do if your tax code is wrong

Contact HMRC or update your details in your personal tax account. If you have paid too much tax, HMRC will either adjust your code so you get the money back through your pay or issue a refund. If you have underpaid, HMRC may collect it through a lower allowance in future. Do not ignore a wrong code, because a mistake can continue for years and grow.

Tax codes if you also file a Self Assessment return

Self-employed people and landlords often have PAYE income as well. If you owe tax of under £3,000 on a Self Assessment return, you may choose to have it collected through your tax code, spread across the following tax year. Be aware that this reduces your allowance and therefore your monthly take-home pay. See our Self Assessment guide for how that works.

Tax codes for London workers

London workers commonly hold several jobs, move between employers or contract roles and work through umbrella companies, all of which raise the chance of an incorrect tax code. If you have changed jobs or started freelancing alongside employment in the past year, check your code in your HMRC account. Our accountants can review your code as part of a self-employed tax return.

Cumulative and emergency tax explained

Most tax codes work on a cumulative basis. Each pay day your employer looks at your total pay and tax-free allowance for the year to date and works out the tax due so far. That means over- or underpayments correct themselves automatically through the year. A code with W1 or M1 on the end is non-cumulative. Each week or month is treated in isolation, with only one period of allowance, which can cause overpayment until HMRC sends a proper code.

Typical situations and the likely code

Tax codes in Scotland and Wales

If you live in Scotland you pay Scottish income tax rates and your code begins with S, for example S1257L. Welsh taxpayers have a C prefix, such as C1257L, though Welsh rates currently follow the English rates. Your allowance is the same across the UK. Our calculators on this site are built for England, Wales and Northern Ireland, so Scottish taxpayers should check the Scottish bands.

Step by step: fixing an incorrect code

1. Find your code on your payslip or in your personal tax account.
2. Check the information HMRC holds: employers, pensions, benefits and other income.
3. Update anything that is wrong online or by phone.
4. Ask your employer to apply the new code once HMRC has issued it.
5. Check the next payslip. If you still pay too much, contact HMRC with copies of your payslips.

Frequently asked questions

What is the standard tax code for 2026/27?

1257L, which reflects the £12,570 personal allowance.

What does BR mean on my payslip?

BR means all income from that job or pension is taxed at the basic rate of 20% and no personal allowance is applied there.

Why is my tax code different from 1257L?

Usually because HMRC has adjusted your allowance for benefits, underpaid tax, a second income or the Marriage Allowance.

How do I get a tax refund if I overpaid?

Check your tax code is correct. HMRC will either correct it through your pay or refund the overpayment after the year end.

Does my tax code affect my National Insurance?

No. National Insurance is calculated separately from income tax.