Understanding UK Tax Codes: Decode Your Payslip With Confidence
Chosen theme: Understanding UK Tax Codes. Learn how those letters and numbers shape your take‑home pay, what to check on your payslip, and how to fix mistakes quickly so you keep the right money in your pocket.
How UK tax codes work under PAYE
The numbers usually show how much tax‑free income you get, divided by ten, while the letters show special circumstances. For example, 1257L means a standard Personal Allowance, and the L indicates you are entitled to it without special restrictions.
HMRC builds your code from your Personal Allowance, adjustments for benefits or underpaid tax, and any transfers like Marriage Allowance. Employers then apply it through PAYE, ensuring each paycheck reflects your most recent tax position and official information.
Check your payslip, P45 after leaving a job, P60 at year end, or the HMRC app and online account. If something looks unfamiliar, compare it to HMRC’s guidance and ask your employer’s payroll team to confirm it matches official records.
Common UK tax codes explained in plain English
1257L — the everyday baseline
This is the standard code for many employees, reflecting a typical Personal Allowance spread across the year. It means you won’t be taxed until your cumulative pay passes the allowance threshold, helping smooth deductions through monthly or weekly payroll cycles.
BR, D0, D1 — codes for additional income streams
BR taxes all income at the basic rate on that job, while D0 and D1 apply higher and additional rates. These often appear on second jobs or pensions when your main job uses the allowance. Scotland may show similar prefixes with regional variations.
Emergency and provisional codes: W1/M1 and OT
Week 1/Month 1 tells payroll not to use cumulative calculations, useful when HMRC data is pending. OT means no Personal Allowance is applied. These codes can be temporary; once HMRC updates your record, your code should shift to the correct cumulative version.
Letters that change everything: K, M, N, S, C, and T
K means your adjustments exceed your allowance, often due to benefits in kind or underpaid tax being collected. It increases your tax deductions to recover amounts during the year, with safeguards to prevent excessive deduction in any single pay period.
Letters that change everything: K, M, N, S, C, and T
M indicates you received a portion of your partner’s allowance; N shows you transferred part of yours. This subtle swap can boost a household’s net income. If you recently married or entered a civil partnership, consider whether this transfer could help you.
Amelia’s emergency code that quietly over‑taxed her
Amelia started a new role without her P45 and saw W1/M1 on her payslip. After sharing starter details, HMRC issued a cumulative 1257L and her employer refunded overpaid tax automatically in the next payroll. She now screenshots every code change for her records.
Ben’s second job stuck on BR
Ben noticed his weekend job used BR while his main job had 1257L. That was correct, but he was worried about over‑tax. After a quick HMRC check, he learned rates were right overall, and his year‑to‑date totals would reconcile without manual intervention.
Fixing errors fast and staying ahead
A sudden jump in deductions, an unfamiliar letter, or an emergency marker can flag issues. Compare your gross pay, code, and tax to date lines across two months. If something looks off, note dates, talk to payroll, and prepare details for HMRC.
Fixing errors fast and staying ahead
Before calling or using the HMRC app, gather your National Insurance number, employer PAYE reference, payslips, and benefit details. Clear, specific information helps HMRC adjust your code quickly, avoiding prolonged emergency codes or accumulating underpayments later in the year.