UK Tax Codes Explained
Your tax code tells your employer how much tax free pay to give you. Here is what 1257L and the other common codes mean, and what to do if yours is wrong.
Every UK employee has a tax code, a short string of numbers and letters printed on every payslip. It looks like admin trivia, but it directly controls how much tax you pay each month. The wrong UK tax code can quietly cost you hundreds of pounds, or land you with an unexpected bill. This guide explains the codes you are most likely to see and what to do about them.
What a tax code does
Your tax code tells your employer’s payroll how much of your pay is tax free before income tax is worked out. HMRC sends the code to your employer, who applies it through PAYE each payday. When your circumstances change, for example you start a second job or begin receiving a pension, HMRC updates the code and your deductions change with it. That is why a sudden change in take home pay often traces back to a new tax code.
What 1257L means
The most common UK tax code is 1257L, and it breaks down neatly. The number 1257 is your personal allowance divided by ten: £12,570. The letter L means you are entitled to the standard personal allowance. So 1257L simply says you get the first £12,570 of your pay tax free, under the normal rules. Most employees with one job and no complications will see this code.
| Code | What it means |
|---|---|
| 1257L | Standard £12,570 personal allowance |
| S1257L | Scottish taxpayer with the standard allowance |
| BR | All income taxed at the 20% basic rate, no allowance |
| D0 | All income taxed at the 40% higher rate, no allowance |
| NT | No tax taken from this pay |
| K | Deductions exceed your allowance, so extra tax is taken |
Where to find your tax code
It is on every payslip, usually near the top next to your pay details. You can also find it in your Personal Tax Account on GOV.UK, and on any P45 or P60 you receive when you leave a job or at the end of the tax year. If the code on your first payslip in a new job looks odd, check what it means before assuming payroll made a mistake. Emergency codes are common on first payslips and usually correct themselves.
When the code is not 1257L
BR often appears on a second job, where your allowance is already used by your main job, so the whole second wage is taxed at 20%. D0 works the same way at the 40% rate. K codes look alarming because they add tax rather than giving an allowance, but they usually just recover something like an overpaid allowance or a taxable benefit. NT is rare and means your pay is not taxed at source at all.
What to do if your code is wrong
Check your code against your situation. One job and no extras should usually mean 1257L, or S1257L in Scotland. If it looks wrong, contact HMRC or check your Personal Tax Account online. Overpaid tax comes back as a refund, while underpaid tax is usually collected by adjusting next year’s code, not as a surprise bill. It is worth checking every time you change jobs.
Common questions
It means a £12,570 personal allowance under the standard rules. The 1257 stands for the allowance divided by ten, and L means you get the standard allowance.
Tell HMRC as soon as you can. If you have paid too much, you get a refund. If you have paid too little, HMRC usually collects it by adjusting your code for the next year.
The S prefix marks you as a Scottish taxpayer, so your employer applies the Scottish bands instead of the rest of UK bands.
Related guides:
UK income tax
Scottish income tax
How we calculate