Tax Codes Explained — What 1257L Means

Your tax code tells your employer how much tax-free pay you get before PAYE starts taking income tax. It appears on every payslip, and a wrong code quietly over-taxes millions of people.

Reading 1257L

The number is your tax-free allowance divided by 10: 1257 × £10 = £12,570, the standard Personal Allowance for 2026/27. The letter says how the allowance is applied: L means the standard allowance. Other common letters: M — you received 10% of your partner's allowance through Marriage Allowance; N — you transferred 10% to your partner; T — your code includes other calculations; S at the front means Scottish rates apply; C means Welsh rates.

Codes with no allowance

BR — everything taxed at 20% (usually a second job or pension). D0 — everything at 40%. D1 — everything at 45%. NT — no tax deducted. 0T — no allowance at all, often used when a new employer has no details yet.

Emergency codes: W1, M1, X

Codes ending W1 (week 1) or M1 (month 1) tax each pay period in isolation instead of cumulatively. They appear when you start a new job without a P45 and usually over-tax you slightly at first; they normally sort themselves out, or HMRC corrects them at the year end.

K codes

A K code means you owe tax on benefits or past underpayments worth more than your allowance — the number is added to your pay instead of subtracted. K475, for example, adds £4,750 to taxable pay across the year.

If your code looks wrong

Check it in your HMRC personal tax account or the HMRC app, and tell HMRC about incorrect income or benefit details. Employers cannot change a code themselves — they must use the one HMRC issues. See also what is PAYE and the marriage allowance guide.