UK Tax Codes Explained: 1257L, BR, K, NT and Emergency Codes

Why your tax code matters

Your tax code is the instruction HMRC gives your employer (or pension provider) about how much of your pay should be tax-free. It’s stamped on every payslip and it drives the deduction maths each pay period. Most of the time it’s right and you never need to think about it. But when it’s wrong, the consequences are real money: a wrong code can over-collect £1,000+ of tax in a year (which you eventually claim back, but only after you spot it), or under-collect (which HMRC will recover, sometimes by coding out the debt against next year’s pay).

The good news: tax codes follow a small set of patterns. Once you can read the number and the letter, you can tell at a glance whether your code looks right or whether you should query it.

The number: your tax-free allowance

The numeric portion of a tax code is your annual tax-free allowance divided by 10. The standard personal allowance for 2026/27 is £12,570 — so the standard tax code is 1257, followed by a letter.

If you have additions or deductions to your personal allowance, the number changes:

A taxable benefit like private medical insurance reduces your allowance. £500 of benefit shrinks the code by 50 (e.g. 1207L).
An expense relief (uniform laundering, professional fees) lifts the allowance. £100 of relief lifts the code by 10 (e.g. 1267L).
A small underpayment from a previous year being coded out reduces the allowance by the amount needed to recover the tax over the year.

The code number is always annual — your employer divides it by the number of pay periods to apply to each payslip.

The letter suffix: how the allowance is treated

The letter sits at the end of the code and tells the employer’s payroll software how the personal allowance applies.

Letter	Meaning
L	Standard tax-free personal allowance. The most common letter — applies to anyone with one job or pension and the standard allowance.
M	Marriage Allowance recipient: you’ve received 10% (£1,260) of your partner’s allowance.
N	Marriage Allowance donor: you’ve given 10% of your allowance to your partner.
T	Other calculations apply — used when the code isn’t a simple L (often when allowances are tapered for income near £100,000).
0T (zero T)	No personal allowance. All income is taxed from the first pound, in the basic/higher/additional bands. Used when the employer has no information about you, or when your allowance has been fully tapered.
BR	Basic rate: all income from this job/pension is taxed at 20% with no personal allowance. Used for second jobs or pensions when the allowance is fully used elsewhere.
D0	All income from this source taxed at 40% (higher rate).
D1	All income from this source taxed at 45% (additional rate).
NT	No tax. Rare — used when an employee is genuinely not subject to UK tax (some non-resident cases, certain seafarers).
K	A “negative allowance” — taxable benefits or owed tax exceed your personal allowance, so an amount is added to your taxable pay each period. See below.

The letter sometimes has a prefix that signals the tax regime:

S before the number (e.g. S1257L) means Scottish income tax bands apply.
C before the number (e.g. C1257L) means Welsh income tax bands apply — currently identical to rUK rates, but legally separate.

K codes — when deductions exceed your allowance

A K code reverses the usual logic. Instead of subtracting tax-free pay from your earnings before applying rates, it adds an amount to your taxable pay. The number is the amount added, divided by 10. K500, for example, adds £5,000 to your annual taxable pay before the rates are applied.

K codes appear when the deductions (taxable benefits + recovered underpayment + state pension being coded into another job) exceed the personal allowance. The most common cause is a company car: a high-value car with a big BIK percentage can easily exceed the £12,570 allowance, triggering a K code that pulls more tax through your salary to cover the benefit.

The maximum tax that a K code can collect in any pay period is 50% of your gross pay. If the K-code arithmetic would deduct more than 50%, the deduction is capped and the residual rolls into the next pay period. This safety valve stops a high-BIK employee from ever receiving zero net pay.

Emergency codes — W1, M1, X

If your employer doesn’t have enough information to calculate cumulative PAYE, they use an emergency code until HMRC issues a proper one. The 2026/27 emergency code is 1257L W1 (weekly paid), 1257L M1 (monthly paid) or 1257L X (other periods).

The W1/M1/X suffix means non-cumulative: each pay period is calculated in isolation, applying only one period’s worth of personal allowance. Year-to-date pay and tax from a previous job are ignored.

When you typically see this:

Starting a new job without a P45 from the previous employer.
Moving from self-employment into PAYE mid-year.
Returning to work after a break with no recent pay history.

Emergency codes don’t necessarily over-tax you — if your monthly pay is steady, they give roughly the right deduction. But they don’t catch up if you’ve already used part of your allowance earlier in the year at a previous employer. The fix is for HMRC to issue a proper cumulative code; this happens automatically once HMRC has matched your records, usually within a pay period or two. Until then, expect mild over-taxation if you joined mid-year.

Reading the most common codes at a glance

1257L — standard. You have one main source of PAYE income and the full personal allowance.
1257L W1/M1/X — emergency code, non-cumulative. Will normalise to 1257L once HMRC catches up.
BR — second job or second pension, all taxed at 20%. Correct if your main job uses your full allowance.
D0 — second job, all taxed at 40%. Correct if your main job already pushes you into the higher-rate band.
K123 — negative allowance of £1,230. Usually means BIK or recovered underpayment exceeds your personal allowance.
S1257L — Scottish taxpayer with the standard allowance.
NT — no tax (rare).

How to check if your code is wrong

Open your Personal Tax Account on GOV.UK. The “Check your Income Tax for the current year” page shows the underlying calculation — your estimated income, the allowance, any deductions or additions, and the resulting code. If the figures HMRC has used don’t match reality (your salary, your benefits), you can update them directly in the portal and the code will be reissued.

Common signals that your code is wrong:

The code on a new job is your old job’s leaving code, not 1257L W1 (your P45 may have transferred incorrectly).
You’re on BR in your main and only job — that’s almost always wrong; you should be on 1257L or similar.
Your number has dropped sharply with no obvious reason — log into the PTA and check what HMRC believes has changed.
You’ve left a job and the old employer is still issuing P45 figures into the new one — you can be temporarily over-allowanced (paying too little) until reconciled.

Reclaim overpaid tax via the Personal Tax Account or, after the tax year ends, on form P800 from HMRC. Underpayments are typically coded out across the next tax year unless they exceed £3,000, in which case you may receive a Simple Assessment or be moved to Self Assessment.

Use the PAYE calculator with your tax code to verify the take-home pay your payslip is showing.

Frequently asked questions

Why does my second job tax everything at 20% with no allowance? Because the personal allowance is given once across all your income — HMRC allocates it to one employer (usually the higher-paying one) and tells the other employer to use a BR code. If both jobs together fall under £12,570 a year, that’s wrong and you can ask HMRC to split the allowance.

My code includes a deduction for “untaxed interest” — what is that? HMRC estimates the interest you’ll earn on savings and codes it against your allowance to collect tax on it through PAYE. The estimate is based on prior years’ interest. If you’ve moved your savings to lower-yielding accounts or used your Personal Savings Allowance fully, update HMRC and the code will be corrected.

I had a K code last year and now it’s gone — what happened? The most common reason is that you no longer have the taxable benefit (e.g. you handed back the company car) and your deductions no longer exceed your personal allowance. The new code will be a standard L code, possibly with a small number adjustment for any remaining benefits.

Does my tax code change if I’m furloughed or on unpaid leave? Not by itself. The code is independent of how much you actually earn. What does change is that with lower pay, you may not use all your allowance during the period of low income — leaving you with overpaid tax that PAYE will refund automatically through subsequent pay periods on a cumulative code.

Can I have a different code at each of two jobs? Yes — codes are issued per employment. The combined effect should be that your total tax across both is right. A typical setup is 1257L at the main job and BR at the secondary.

Authoritative source: GOV.UK Tax codes: what your tax code means.