Your tax code tells your employer or pension provider how much tax-free pay to give you and which tax rates to apply. The most common code for 2026/27 is 1257L. The number is your tax-free Personal Allowance of £12,570 with the last digit dropped, and the "L" means you get the standard allowance. HMRC issues the code, and you get a separate code for each job or pension. If yours is anything other than 1257L, the letters and numbers explain why. This guide lists the codes and what each one means, and covers what to do if yours looks wrong.
Tax code 1257L explained
The standard Personal Allowance for 2026/27 is £12,570, unchanged from 2025/26. HMRC's employer guidance expresses it as £242 a week or £1,048 a month. To build a code, HMRC starts with your allowance, deducts anything it needs to tax through your pay, and then replaces the final digit with a letter. With the full £12,570 and nothing to deduct, you get 1257L.
HMRC's own example shows how deductions work. If your employer provides medical insurance worth £1,570, that benefit is taken off the £12,570, leaving £11,000 of tax-free pay. The code becomes 1100L. The same mechanism collects tax on other company benefits, untaxed savings interest above your Personal Savings Allowance, the High Income Child Benefit Charge, and tax underpaid in an earlier year.
The allowance is withdrawn for higher earners. It falls by £1 for every £2 of adjusted net income above £100,000 and is nil at £125,140. If HMRC expects your income to be in that range, your code will be lower than 1257L, and may become 0T.
List of tax codes and what they mean
| Code or letter | Meaning |
|---|---|
| L | Standard tax-free Personal Allowance |
| M | Marriage Allowance: you have received 10% of your partner's Personal Allowance |
| N | Marriage Allowance: you have transferred 10% of your Personal Allowance to your partner |
| T | Your code includes other calculations to work out your allowance |
| K | Untaxed income or deductions are higher than your Personal Allowance |
| 0T | No allowance: it is used up, or a new employer lacks the details needed to give a code |
| BR | All income from this job or pension taxed at the basic rate (20%), usually a second job |
| D0 | All income taxed at the higher rate (40%) |
| D1 | All income taxed at the additional rate (45%) |
| NT | No tax is deducted from this income |
| S prefix | Scottish rates apply (for example S1257L, SBR, and SD0 to SD3 for the intermediate, higher, advanced and top rates) |
| C prefix | Welsh rates apply (for example C1257L, CBR, CD0, CD1) |
| W1, M1, X, NONCUM | Emergency or non-cumulative basis: tax worked out on each week's or month's pay alone |
For Scottish taxpayers the "SD" codes apply Scotland's rates. For 2026/27 these are 21% intermediate (SD0), 42% higher (SD1), 45% advanced (SD2) and 48% top (SD3).
K codes
A K code means the amounts HMRC needs to collect through your pay are larger than your allowance. Typical causes are a valuable company car, State Pension or taxable state benefits, or a debt from an earlier year. Instead of giving you tax-free pay, the code collects tax on the excess through the wages or pension it is used on. There is a safeguard. Under the "overriding limit" in the PAYE Regulations, an employer or pension provider cannot deduct more than 50% of your pre-tax pay in tax using a K code.
Emergency tax codes: W1, M1 and X
The emergency codes for 2026/27 are 1257L W1, 1257L M1 and 1257L X. W1 applies to weekly pay, M1 to monthly pay and X where pay dates vary, and some payroll software shows "NONCUM" instead. They are usually used when a new employer does not have your previous income details, typically because there was no P45. You may also be put on one when company benefits or the State Pension start.
Normally PAYE is cumulative: each payday, tax is worked out on your total pay so far in the tax year, so earlier over- or under-deductions correct themselves. On an emergency code, tax is worked out on that week's or month's pay alone, as if you were paid that amount every period. That can leave you paying too much or too little tax. HMRC usually issues a proper code once it has details from both employers, which can take up to 35 days from your start date.
Why your tax code changes and how to fix a wrong one
HMRC changes a code when your income or circumstances change. Common triggers include starting a new or additional job or pension, receiving taxable benefits, savings interest above the Personal Savings Allowance, a change in the State Pension, claiming Marriage Allowance or work expenses, and the High Income Child Benefit Charge. If you are on the wrong code and owe tax, HMRC will usually collect it through your code over one or more tax years.
A wrong code is usually the result of wrong or missing information, often an estimate of income or benefits that is out of date. To fix it:
- Check online. Use HMRC's Check your Income Tax service or the HMRC app to review your employments, estimated income, benefits and expenses, and update anything wrong;
- Chase the P45. If you changed jobs without one, ask your old employer. It gives HMRC the missing figures;
- Allow time. HMRC tells you and your employer the new code within 15 working days. It should appear on your next or following monthly payslip, or by your third weekly payslip;
- Get the money back. Once HMRC has your details, any overpayment is normally refunded through your pay under the new code. Otherwise it is settled after the tax year ends.
Your code also appears on your payslip, your P60 and any coding notice. Employers receive code changes from HMRC as P9T notices for individual employees and P9X notices for general changes. The full list of letters is on gov.uk, and the 2026/27 allowance and emergency codes are on HMRC's rates and thresholds for employers page.
Acumon reviews coding notices and corrects underpayments for individuals through our income tax return service, and operates codes correctly for employers through PAYE services. If you have a K code, a code near 0T or two jobs, it is worth having your coding notice checked against your actual income.