The little string of numbers and letters on your payslip decides how much tax comes out of your pay every month — and a wrong one is among the most common reasons people over- or underpay. This 2026/27 guide decodes it all: what 1257L means, the BR, D0, D1, K, 0T and NT codes you might see on a second job or pension, the S and C prefixes for Scotland and Wales, the emergency W1/M1/X codes, and — most usefully — how to check your code and fix it if it is wrong. A worked example shows a K code in action.
The standard code for most people with one job in 2026/27 is 1257L. It breaks into two parts:
The number (1257): your tax-free Personal Allowance (£12,570) with the last digit removed.
The letter (L): you get the standard Personal Allowance.
Together they tell your employer to spread £12,570 of tax-free pay evenly across the year and tax the rest at 20%, 40% or 45% as you cross each band. If your only job shows 1257L, you are almost certainly being taxed correctly. Other letters tweak the allowance — for example M and N relate to the Marriage Allowance.
BR, D0, D1, K, 0T and NT
These codes appear most often on a second job or pension, where your Personal Allowance is already used against your main income:
Code
What it does
BR
All income at basic rate (20%), no allowance
D0
All income at higher rate (40%)
D1
All income at additional rate (45%)
K
Adds to taxable pay (deductions exceed allowance)
0T
No allowance; taxed at 20/40/45% by amount
NT
No tax deducted at all (rare)
A BR or 0T on your only job usually signals a problem and possible overpayment — check it. A K code is the inverse of a normal code, adding an amount to your taxable income (more below), capped so it never takes more than 50% of your pay.
The S and C Prefixes
A letter beforethe number signals which nation's rates apply, based on where you live (not where you work):
S (e.g. S1257L): Scottish taxpayer — taxed using the Scottish rates and bands, which differ from the rest of the UK.
C (e.g. C1257L): Welsh taxpayer — taxed at the Welsh rates (currently aligned with England and Northern Ireland, but set by the Welsh Government).
HMRC sets the prefix from your home address. If you move across a border, your code should update. Compare the bands with the Scotland vs England income tax comparison.
Emergency Tax Codes
When HMRC lacks full details — typically after starting a job without a P45, or on a first pension drawdown — you may be put on an emergency code, shown with W1 (week 1), M1 (month 1) or X after it.
These work on a non-cumulative basis: tax is calculated only on that pay period rather than across the year to date, which can cause over- or under-payment until your correct cumulative code arrives. Any overpayment is usually refunded automatically once the right code is applied — see the emergency tax code guide.
How to Check Your Tax Code
Your code appears on your payslip, your P45 when you leave a job, your P60 at year end, and any PAYE Coding Notice (P2) from HMRC.
The simplest check is your Personal Tax Account on gov.uk or the HMRC app, which shows your current code, how it was worked out, and lets you report changes. Check it at the start of each tax year and whenever your circumstances change — a wrong code is one of the most common causes of paying the wrong tax.
How to Fix a Wrong Code
If your code looks wrong, tell HMRC through your Personal Tax Account, the HMRC app, or by phone, explaining what has changed — a second job ended, a company benefit stopped, or you have only one income source.
HMRC issues a corrected code to your employer or pension provider, applied on the next payday. If a wrong code caused an overpayment, the fix usually refunds it through your pay; if the tax year has ended, you may get a P800 calculation and a refund. If you underpaid, HMRC typically recovers it by adjusting a future code. Check what you should be paying with the take-home pay calculator.
Worked Example: A K Code in Action
Consider an employee with a £20,000 salary and a company car generating a taxable benefit of £14,000 — more than the £12,570 Personal Allowance. Figures are illustrative for 2026/27.
Allowance vs deductions: the £14,000 benefit exceeds the £12,570 allowance by £1,430.
The code becomes a K code reflecting roughly that excess (e.g. K143), with the last digit dropped.
Effect: instead of deducting an allowance, the code adds the coded amount to taxable pay, so tax is collected on salary plus the excess benefit.
Safeguard: a K code can never take more than 50% of that period's pay in tax.
K codes are common for those with company cars or other large benefits in kind — see the P11D benefits in kind guide for how the benefit is valued.
1257L is the standard tax code for most people with one job and no complications in 2026/27. The number, 1257, is your tax-free Personal Allowance (£12,570) with the final digit removed. The letter L means you are entitled to the standard Personal Allowance. Together they tell your employer to give you £12,570 of tax-free pay spread evenly across the year before deducting income tax on the rest. If your code is 1257L, you are almost certainly being taxed correctly on a single, ordinary salary.
What do the letters BR, D0 and D1 mean?
These codes tax all of the income from that source at a single rate with no Personal Allowance. BR taxes everything at the basic rate (20%); D0 taxes everything at the higher rate (40%); D1 taxes everything at the additional rate (45%). They are most often used on a second job or pension, because your Personal Allowance is already being used against your main income. A BR code on your only job, however, usually means something is wrong and you may be overpaying — worth checking with HMRC.
What is a K tax code?
A K code is the reverse of a normal code: instead of giving you tax-free pay, it adds an amount to your taxable income. It is used when deductions — such as taxable benefits in kind (a company car), untaxed income, or tax owed from a previous year being collected — exceed your Personal Allowance. With a K code, your employer adds the coded amount to your earnings before calculating tax. There is a safeguard: a K code can never take more than 50% of your pay in tax in any period.
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What are the 0T and NT tax codes?
0T (zero-T) means you get no Personal Allowance and pay tax on all your income at the relevant rates (20%/40%/45%) according to how much you earn — unlike BR, which fixes everything at 20%. It is often applied when HMRC has no information about you, such as starting a new job without a P45, or when your Personal Allowance is fully used elsewhere. NT means No Tax — no income tax is deducted at all. NT is rare and applies in specific situations, such as certain non-residents or particular pension arrangements.
What do the S and C prefixes mean?
A tax code starting with S means you are a Scottish taxpayer and your income tax is calculated using the Scottish rates and bands, which differ from the rest of the UK. A code starting with C means you are a Welsh taxpayer, taxed at the Welsh rates (currently the same as England and Northern Ireland, but set by the Welsh Government). So S1257L is the Scottish equivalent of 1257L, and C1257L the Welsh one. Your prefix is based on where you live, not where you work, and HMRC decides it from your address.
What is an emergency tax code?
An emergency tax code is a temporary code used when HMRC does not yet have full details of your income — for example after starting a new job without a P45, or taking a first pension drawdown. Emergency codes are shown with W1 (week 1), M1 (month 1) or X after them, meaning tax is worked out only on that pay period rather than cumulatively across the year. This can lead to over- or under-payment until HMRC issues your correct cumulative code. Any overpayment is usually refunded automatically once the right code is applied.
How do I check my tax code?
Your tax code appears on your payslip, your P45 when you leave a job, your P60 at the end of the tax year, and any PAYE Coding Notice (P2) HMRC sends you. The easiest way to check it is through your Personal Tax Account on gov.uk or the HMRC app, which shows your current code, how it was worked out, and lets you tell HMRC about changes. Always check your code at the start of a new tax year and whenever your circumstances change — a wrong code is one of the most common reasons people over- or underpay tax.
How do I fix a wrong tax code?
If you think your tax code is wrong, contact HMRC through your Personal Tax Account, the HMRC app, or by phone. Explain what has changed — for example you have left a second job, a company benefit has stopped, or you have only one source of income. HMRC will issue a corrected code to your employer or pension provider, who applies it on the next available payday. If you have overpaid because of a wrong code, the correction usually refunds it automatically through your pay; if the tax year has ended, you may receive a P800 calculation and a refund.
Why has my tax code changed?
Tax codes change for many reasons: a new job or pension, a change in taxable benefits in kind (such as getting or giving up a company car), claiming or losing an allowance, repaying tax owed from a previous year, the start of the State Pension, or HMRC reconciling an estimate. Each change is explained on the PAYE Coding Notice (P2). A changed code is not automatically wrong — but it is always worth reading the notice to understand why, and checking it reflects your actual circumstances so you pay the right amount.
Can a wrong tax code mean I owe money?
Yes. If your code gave you too much tax-free pay — for example it kept an allowance you were no longer entitled to, or did not account for a taxable benefit — you will have underpaid and HMRC will seek to recover it, usually by adjusting a future year’s code (often via a K code) so the tax is collected gradually from your pay. Conversely, a code that gave you too little allowance means you overpaid and are owed a refund. Checking your code promptly limits the size of any adjustment and avoids an unexpected bill.
Disclaimer: This guide reflects 2026/27 UK PAYE tax-code rules. The Personal Allowance, the rates behind each code and the Scottish and Welsh bands change at fiscal events, and your own code depends on your full circumstances. Check your code in your Personal Tax Account and refer to gov.uk before acting; contact HMRC to correct a code you believe is wrong.