Tax Guide · 2025/26

UK Tax Codes Explained: 2025/26

Your tax code is a short string of numbers and letters on every payslip — but it controls how much tax your employer deducts. Get it wrong and you could be hundreds or thousands of pounds out of pocket. This guide decodes every UK tax code in use for 2025/26.

Last updated: 6 April 2025Last reviewed: 6 April 2025How we verify

How Tax Codes Work

A UK tax code has two parts: numbers and letters.

Numbers tell your employer your annual tax-free allowance — divided by 10. So 1257 means £12,570 per year tax-free. Your employer spreads this across pay periods: £241.73 per week or £1,047.50 per month.

Letters indicate special circumstances — Scottish or Welsh resident, no allowance, second job, etc.

The Standard Code: 1257L

1257L is the most common UK tax code for 2025/26. Used for the majority of employees with one job and no special circumstances. It applies the full £12,570 personal allowance.

On a £30,000 salary with 1257L, your employer deducts 20% income tax on the £17,430 above the allowance — £3,486 per year, or £290.50 per month.

All UK Tax Code Letters Decoded

Letter	Meaning
L	Standard Personal Allowance applies. Most common.
M	Marriage Allowance recipient — gets extra £1,260.
N	Marriage Allowance giver — transferred £1,260 to spouse.
T	Other calculations — usually high income (allowance taper).
0T	Personal Allowance used up or unknown. No tax-free amount.
BR	All income taxed at Basic Rate (20%). Common for second jobs.
D0	All income taxed at Higher Rate (40%). Another job/income.
D1	All income taxed at Additional Rate (45%).
K	Negative allowance — owe extra tax (state pension, benefits, etc.).
NT	No Tax — rare, used for non-residents or special cases.
W1 / M1 / X	Emergency code suffix — each pay period taxed in isolation.
S (prefix)	Scottish taxpayer — Scottish Income Tax bands apply.
C (prefix)	Welsh taxpayer — Welsh Rates of Income Tax (currently same as rUK).

Emergency Tax Codes

When HMRC lacks your full income history (typically new job without P45), your employer uses an emergency code with a W1, M1 or X suffix. This treats each pay period in isolation without cumulative adjustments — often resulting in overpayment because the system doesn\'t recognise unused allowance from earlier in the year.

Once HMRC has your details (usually after your first payslip is filed), your code is corrected automatically and any overpaid tax is refunded through subsequent paypackets.

K Codes — When You Owe Tax

K codes are unusual but important. If your tax-free allowance is wiped out and you owe additional tax — typically due to:

Untaxed state pension exceeding personal allowance
Company benefits (car, healthcare, etc.) over the allowance
Underpaid tax from previous years
Allowance fully tapered above £125,140

A K475 code means £4,750 of additional taxable income is added to your salary for PAYE purposes. Maximum K code deduction is 50% of pay in any period.

Multiple Jobs & Tax Codes

If you have two jobs, your personal allowance is usually applied to your main job (1257L) and your second job is taxed at BR (20% on everything). You can ask HMRC to split the allowance between jobs if it suits you better.

For higher earners, the second job may use D0 (40% on everything) if your combined income pushes you into higher rate territory.

Scottish & Welsh Tax Codes

If you live in Scotland, your code starts with S (e.g. S1257L) and your employer applies Scottish Income Tax rates: 19% Starter, 20% Basic, 21% Intermediate, 42% Higher, 45% Advanced, 48% Top.

If you live in Wales, your code starts with C (e.g. C1257L). Welsh Rates of Income Tax (WRIT) are currently set identical to rUK, but the Welsh Government can vary them.

Residency is determined by your main home address, not where your employer is based. If you move between regions during the year, HMRC apportions your tax.

How to Check & Fix Your Tax Code

Look at your latest payslip or P60 — tax code is shown prominently
Log into your Personal Tax Account at gov.uk/personal-tax-account
Check the “Income Tax” section for your current and previous codes
If wrong, click “Tell HMRC about a change” or call HMRC on 0300 200 3300
HMRC will issue a corrected code (via P6 Coding Notice) to your employer
Overpaid tax is refunded through subsequent pay; underpaid tax may be collected via future codes

FAQs

What does the tax code 1257L mean?

1257L is the standard tax code for 2025/26 — the most common in the UK. The 1257 means £12,570 personal allowance (the number is your allowance divided by 10). The L means you get the standard Personal Allowance. So someone on 1257L can earn £12,570 tax-free per year.

What is an emergency tax code?

An emergency tax code (often W1, M1 or X suffix, like 1257L W1) is used when HMRC doesn't have your full income history — typically when you start a new job without a P45. It treats each pay period in isolation, often resulting in overpayment until corrected.

What does a K code mean?

A K code (e.g. K475) means your tax-free allowance has been reduced to zero AND you owe extra tax — usually because of underpaid tax from previous years, untaxed benefits, or state pension exceeding the allowance. The number represents the additional taxable amount, divided by 10.

How do I check my tax code?

Your tax code is on every payslip and on your P60. You can also check it via your HMRC personal tax account at gov.uk. If it looks wrong, contact HMRC immediately — incorrect tax codes can mean you're paying too much or too little tax.

What's the difference between Scottish and English tax codes?

Scottish tax codes start with an S (e.g. S1257L). They tell employers to apply Scottish income tax rates (19%–48% across 6 bands) instead of rUK rates (20%/40%/45%). Welsh tax codes start with C. Northern Ireland uses standard UK codes.

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About the author

Emma Clarke

UK Tax Writer

Emma Clarke has been writing about UK personal tax since 2018, with a particular focus on Self Assessment, PAYE coding and the practical mechanics of how HMRC actually applies the rules to ordinary salaries. Her work concentrates on translating the dense language of HMRC manuals and Finance Act schedules into worked examples that show, pound by pound, how income tax and National Insurance reduce a gross salary to the figure that lands in a UK bank account. Emma covers the full PAYE lifecycle: tax codes (1257L, BR, K codes, emergency codes), the Marriage Allowance, the High Income Child Benefit Charge, salary sacrifice arrangements and their effect on pensionable pay, the Apprenticeship Levy, and the differences between the rUK and Scottish income-tax regimes. She is particularly interested in the edge cases that catch PAYE employees out — the £100,000 personal-allowance taper, the 60% effective marginal rate it creates, and the interaction between student-loan plans and pension contributions. Every figure in Emma's articles is verified against the current HMRC rates pages and worked through a Self Assessment calculation by hand before publication. She writes to CalcHub's editorial standards: primary-source citations, plain English, no promotional language, and clear "this is general information, not financial advice" disclaimers where appropriate.

Personal-finance writer since 2018
UK tax specialism — PAYE, Self Assessment, National Insurance
Writes to CalcHub editorial standards (primary-source citation, annual review)

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Disclaimer: Tax codes are issued by HMRC based on your personal circumstances. If your code seems wrong, always contact HMRC directly via gov.uk or call 0300 200 3300. This guide is for general understanding only.