UK Tax Codes Explained: 1257L, K, BR, OT and Every Letter Decoded

Quick answer

Your UK tax code is a short string of digits and letters that tells your employer (or pension provider) how much tax to deduct from each pay. It's recalculated each tax year by HMRC.

The standard 2025/26 tax code is 1257L. Decoded:

• 1257 → £12,570 personal allowance.
• L → you're entitled to the standard, untouched personal allowance.

Most UK PAYE workers have this code. If yours is different, the difference is usually meaningful — and worth understanding.

How a tax code becomes your tax-free amount

The numerical part of the tax code maps to your tax-free annual allowance:

Number × 10 = annual tax-free allowance (£)
1257 × 10  = £12,570

This applies to the whole tax year (6 April to 5 April). HMRC tells your employer to spread this allowance across pay periods (e.g. £1,047.50 per month for a monthly payroll) and tax everything above it at the relevant band rate.

Every common letter, decoded

Standard suffixes (entitlement letters)

Special-rate codes (no allowance used at all)

Scottish, Welsh and Northern Irish prefixes

Northern Ireland uses standard UK PAYE without a prefix.

Non-cumulative (emergency) suffixes

These typically apply when you've just started a new job and your previous employer's P45 hasn't yet caught up. They usually result in overpaying tax in the short term, with HMRC catching up later in the tax year.

K codes (the negative allowance)

K codes are the unusual one. Instead of reducing your taxable income, a K code adds to it:

K475 means: add £4,750 to your annual taxable income

This happens when your "deductions" — things HMRC takes off your allowance — exceed the personal allowance itself. The most common cause is a sizeable company-car BIK:

• Standard PA: £12,570
• Company-car BIK on a £45,000 BMW: £15,750 (at 35% BIK rate)
• Net: PA is gone, plus an extra £3,180 to be added → tax code K318

If your code is K-prefix, your taxable pay is higher than your gross pay for tax purposes. The deduction can't exceed 50% of your pay in any pay period — HMRC defers any excess to later periods.

The Spring 2026 tax codes (England, Wales, NI)

For a worker on £35,000 with no special circumstances:

• Standard 2025/26 code: 1257L
• Married, received Marriage Allowance: 1383M (1257 + 126)
• Married, transferred Marriage Allowance: 1131N (1257 − 126)
• Second job, this is the second: BR (everything at 20%)
• High earner, £110,000: something like 757L (PA tapered to £7,570 because of £100k+ income)
• Has company-car BIK of £8,000: 457L (1257 − 800)
• New job mid-year, P45 not yet processed: 1257L W1/M1

Tax code prefixes (Scotland)

Scottish income tax has 6 bands, but the tax code looks similar — just with S in front:

How to check your tax code

Three ways, fastest first:

1. HMRC app — log in, "Tax codes" section shows current code and how it was calculated.
2. Personal Tax Account at gov.uk/personal-tax-account — same info, web-based.
3. Recent payslip — code appears in a field labelled "Tax code" or similar.
4. P60 (annual) or P45 (when leaving a job).
5. Coding notice (P2) — HMRC posts these when codes change mid-year; many people miss them.

How to fix a wrong tax code

If you believe your code is wrong — you've not had a company car for 2 years but it's still in your code, or you've started Marriage Allowance but the M suffix hasn't appeared — fix it via:

Fastest: Personal Tax Account online

1. Log in at gov.uk/personal-tax-account.
2. Go to "Check your Income Tax".
3. View current and prior tax codes.
4. Click "Update your tax code" or "Tell HMRC about a change".
5. Update the offending item (remove a benefit you no longer have, add a Marriage Allowance claim, declare an estimated income change).

HMRC processes the update typically within 48 hours. The new code feeds through to your next payroll automatically (or you'll get a corrected payslip mid-period).

Phone: 0300 200 3300

If the online flow doesn't have your specific situation, phone HMRC's Income Tax helpline. Mon–Fri 8am–6pm. Have your NI number and a recent payslip ready. Average wait time has been improving but allow 15–30 minutes.

Via your employer

For some changes (e.g. correcting a benefit reported by your employer), the fix needs to come from them via the next payroll RTI submission. If HMRC tells you "your employer needs to update this", that's the route.

The cumulative system — why mid-year corrections work

UK PAYE is cumulative: each pay period, your employer calculates "how much tax should this employee have paid YTD against their YTD income?" and adjusts. This means:

• A wrong code that overcharged you in March is automatically refunded when corrected by the next payroll if it happens in the same tax year.
• A wrong code that undercharged you is collected through the rest of the year.
• This is also why W1/M1/X codes are often unfair — they break the cumulative logic.

If a mistake spans tax years, HMRC reconciles separately and can either:

• Issue a P800 (tax calculation summary) with a refund cheque or BACS payment.
• Adjust the following year's tax code to recover/refund the difference.
• For larger amounts: ask for a separate cheque payment.

Tax codes for second jobs

The second job typically gets BR (basic rate, 20% on everything). This works correctly if your first job uses the full personal allowance and your total income stays in the basic-rate band.

It doesn't work if:

• Your main job pays less than your PA (£12,570) — you're effectively losing some allowance because BR doesn't apply it.
• Your total income crosses the higher-rate band — BR undercharges you, and you'll owe tax at year-end.

The fix: split your personal allowance between two jobs. HMRC's Personal Tax Account lets you allocate it (e.g. £6,000 to job A, £6,570 to job B). The codes then become non-standard for both jobs.

State Pension and PAYE — a confusing case

The State Pension is taxable but not taxed at source. When you start receiving it, HMRC reduces your tax code at any PAYE employment (or workplace pension) to claw back the tax on the State Pension via your other income.

For example, a £11,500/year State Pension recipient with a £8,000 workplace pension:

• State Pension: not taxed at source.
• Workplace pension: tax code reduced from 1257L by £11,500 → roughly L107 if expressed as code-style.
• Effectively, the workplace pension absorbs the tax that should have been on the State Pension.

This works in most cases but breaks when total income falls below the PA — then HMRC has to refund via P800.

Tax codes and the 60% trap

For earners in the £100,000–£125,140 band, the personal allowance tapers. HMRC doesn't perfectly capture this through PAYE alone — you'll typically see:

• A code that's been adjusted down (e.g. 757L for someone at £110k).
• Likely also needing Self Assessment to true up.

Pension salary-sacrifice contributions in this band can save 60p of every £1 sacrificed — see our tax-reduction post.

What to do if you can't make sense of yours

1. Sign in to the HMRC app or Personal Tax Account.
2. Look at "How your tax code was calculated" — this shows the breakdown (PA + adjustments − deductions).
3. Compare against your payslips for current and prior tax year — look for unexplained changes.
4. Compare your tax code letter against the table above.
5. If something doesn't reconcile, update via the online flow or call HMRC.

The single biggest reason people overpay tax through PAYE is a wrong tax code carried over from a previous year (e.g. a company car you no longer have, or an estimate of investment income that's now too high). Five minutes in the Personal Tax Account fixes most cases.

Try the calculator

For a take-home calculation that lets you check what your code should be producing:

Sources

• HMRC: Tax codes
• HMRC: Check your Income Tax for the current year
• HMRC: Personal Tax Account
• HMRC: Update your Income Tax estimated income
• HMRC PAYE Manual (PAYE12000) — Tax code basics