List of tax codes and what they mean in 2026/27

Your tax code tells your employer or pension provider how much Income Tax to deduct from your pay through PAYE. For most people with one straightforward job or pension in the 2026/27 tax year, the standard code is 1257L, which reflects the £12,570 Personal Allowance.

This list of tax codes and what they mean explains the most common UK codes, how to read the numbers and letters, what emergency codes mean and what to do if the code on your payslip does not match your circumstances.

Quick list of tax codes and what they mean

The table below covers the codes most employees, directors and pensioners are likely to encounter.

Tax code	What it means
1257L	Standard £12,570 Personal Allowance for many people with one job or pension
L	Entitled to the standard Personal Allowance
M	You have received part of your spouse or civil partner’s Personal Allowance through Marriage Allowance
N	You have transferred part of your Personal Allowance to your spouse or civil partner
T	HMRC needs to review some items used to calculate the code
0T	No Personal Allowance is available for this income source
BR	All income from this source is taxed at the basic rate
D0	All income from this source is taxed at the higher rate
D1	All income from this source is taxed at the additional rate
NT	No tax is deducted from this income
K	Deductions included in the code are greater than your available Personal Allowance
C	Welsh Income Tax rates apply
S	Scottish Income Tax rates apply
W1 / M1 / X	Emergency or non-cumulative tax treatment applies

HMRC currently uses 1257L for most people with one job or pension and no adjustments that change their standard allowance.

How to read a UK tax code

Most tax codes contain a number and one or more letters.

The number normally represents the amount of tax-free income available from that employment or pension, with the final digit removed.

For example:

1257 × 10 = £12,570

A person with the code 1257L therefore normally has £12,570 of tax-free income allocated to that PAYE source.

The letter gives additional instructions about the person’s circumstances or how the allowance should be used.

A different number does not automatically mean your tax code is wrong. HMRC may adjust the number where there is other untaxed income, taxable employment benefits or another amount that needs to be collected through PAYE.

What does tax code 1257L mean?

1257L is the standard tax code used for many employees and pensioners in 2026/27.

The number 1257 represents £12,570 of tax-free income, while the letter L means the person is entitled to the standard Personal Allowance.

The code is most likely to apply where you have one main employment or pension and no significant adjustments for untaxed income, benefits or previous tax underpayments.

However, 1257L is not automatically the correct code for everyone. Your personal circumstances can change the amount of allowance available through PAYE.

What does a BR tax code mean?

BR means that all income from that particular job or pension is taxed at the basic rate.

It is commonly used for a second job or pension where your Personal Allowance is already being used against another income source.

BR does not mean that you are automatically on an emergency tax code.

That is an important distinction. An emergency tax code normally has W1, M1, X or sometimes NONCUM attached to it.

If BR appears on your main employment and you expected to receive a Personal Allowance there, check whether HMRC has the correct details for all of your jobs and pensions.

What do D0 and D1 mean?

D0 and D1 are fixed-rate codes commonly used where a person’s Personal Allowance and lower tax bands are already being used elsewhere.

For taxpayers outside Scotland:

• D0 means all income from that source is taxed at the higher rate.
• D1 means all income from that source is taxed at the additional rate.

These codes are often associated with a second employment or pension.

Do not assume that a D0 or D1 code is wrong simply because it produces a large deduction. The correct code depends on your total income across all sources.

What does 0T mean?

0T means that no Personal Allowance is available against that particular employment or pension.

HMRC may use it where:

• your Personal Allowance has already been used;
• your allowance has reduced to zero; or
• a new employer does not yet have enough information to calculate another code.

Income is still taxed through the appropriate tax bands rather than at one single rate.

If 0T appears unexpectedly, check whether HMRC has complete information about your employment and other income.

What does a K tax code mean?

A K code works differently from an ordinary tax code.

HMRC uses a K code where income or deductions that need to be collected through PAYE are greater than your available Personal Allowance.

This can happen where you:

• owe tax from an earlier year;
• receive taxable State Pension or certain taxable benefits;
• receive taxable company benefits such as a company car; or
• have other untaxed income that HMRC is collecting through PAYE.

With a K code, the number multiplied by 10 broadly represents an amount added to taxable pay rather than an amount deducted from it.

For example, K475 broadly represents £4,750 being added when calculating the taxable amount.

There is also an important safeguard. When an employer or pension provider operates a K code, the tax deducted cannot exceed half of that person’s pre-tax wages or pension for the pay period.

Company benefits can affect tax codes because HMRC may reduce the amount of tax-free pay available through PAYE. Directors and employers dealing with company benefits can also use Fusion’s limited company accounting support where wider company tax and payroll advice is required.

What do M and N tax codes mean?

M and N relate to Marriage Allowance.

M means that you have received part of your spouse or civil partner’s Personal Allowance.

N means that you have transferred part of your Personal Allowance to your spouse or civil partner.

HMRC then adjusts the PAYE code to reflect the transfer.

These letters do not indicate your marital status by themselves. They specifically relate to a Marriage Allowance transfer that affects your tax calculation.

What does a T tax code mean?

A tax code ending in T means HMRC needs to review some of the items used to calculate your code.

It can appear where your tax position needs additional consideration rather than fitting a straightforward standard allowance calculation.

If the numbers in a T code appear unexpected, check the calculation rather than assuming the T itself is an error.

What does NT mean?

NT means no tax is deducted from that particular income.

HMRC uses NT only in specific circumstances. It should not be treated as a general tax-free code or something an employer can choose to apply independently.

If NT appears unexpectedly, confirm the position with HMRC before relying on it.

What do Scottish tax codes mean?

If you are a Scottish taxpayer, your tax code normally begins with S.

For example, a Scottish taxpayer entitled to the standard Personal Allowance could have S1257L.

Scotland has its own Income Tax bands for earnings, pensions and most other non-savings, non-dividend income. For 2026/27, these include starter, basic, intermediate, higher, advanced and top rates.

Common Scottish codes include:

Code	Meaning
S1257L	Standard allowance with Scottish Income Tax rates
S0T	No Personal Allowance; Scottish rates apply
SBR	All income from the source taxed at the Scottish basic rate
SD0	Income from the source taxed at the Scottish intermediate rate
SD1	Income from the source taxed at the Scottish higher rate
SD2	Income from the source taxed at the Scottish advanced rate
SD3	Income from the source taxed at the Scottish top rate

The S prefix is important because Scottish rates and bands differ from those applying elsewhere in the UK.

What do Welsh tax codes mean?

If your main home is in Wales, your tax code normally begins with C.

For example, C1257L combines the Welsh C prefix with the standard 1257L allowance code.

Other Welsh codes include:

Code	Meaning
C1257L	Standard allowance with Welsh Income Tax rates
C0T	No Personal Allowance
CBR	All income from the source taxed at the Welsh basic rate
CD0	All income from the source taxed at the Welsh higher rate
CD1	All income from the source taxed at the Welsh additional rate

The C is a prefix indicating Welsh tax treatment. It is not a replacement for the L in 1257L.

What are W1, M1 and X emergency tax codes?

Emergency tax codes usually end in W1, M1 or X.

W1 means week 1.

M1 means month 1.

X can be used where pay dates vary.

Some payroll systems may display NONCUM instead.

Under an emergency code, tax is calculated using the current pay period rather than taking all earlier pay and tax in the tax year into account.

This can mean too much or too little tax is deducted.

Emergency codes are commonly associated with circumstances such as starting a new job without complete previous pay information or a change in taxable benefits or State Pension.

This article only covers emergency codes at a high level because Fusion’s separate Emergency Tax Code guide will cover W1, M1 and X in more detail.

Why can your tax code change?

A change does not automatically mean something has gone wrong.

HMRC can adjust a tax code when the information used to calculate your PAYE position changes.

Examples include:

• starting or leaving a job;
• taking on an additional job or pension;
• a change in estimated income;
• starting or stopping a taxable employment benefit;
• receiving State Pension;
• tax owed from an earlier year;
• changes to Marriage Allowance; or
• changes in untaxed income.

A company car or private medical insurance, for example, can reduce the amount of tax-free income available through your code.

Where a code is affected by a broader or more complex tax issue, Fusion’s tax advisory services can help review the wider tax position.

What happens if you have more than one job or pension?

You only receive one Personal Allowance for the tax year, even if you have several PAYE income sources.

HMRC may allocate that allowance to one main job or pension and use a different code for another source.

A second job or pension might therefore use BR, D0 or D1 depending on your overall income.

Having several tax codes is not automatically a problem. The important question is whether HMRC has allocated the allowances and tax bands correctly across all of your income.

If you also have income that needs to be reported outside PAYE, Fusion’s Self Assessment tax return support may be relevant.

Do self-employed people receive a tax code?

Self-employed income itself is generally not taxed through a PAYE tax code.

A sole trader normally reports business profits and calculates the related tax through Self Assessment.

However, someone can be self-employed and also have employment or pension income. Any PAYE income can still have its own tax code.

It is therefore more accurate to say that self-employment itself does not create a PAYE tax code rather than saying a self-employed person can never have one.

What should employers do with employee tax codes?

Employers use tax codes in payroll software to calculate the Income Tax deducted from employees’ pay.

When HMRC issues a new code, employers should update the payroll record as soon as possible and normally before the next payment to the employee.

An employer should not invent or change an employee’s HMRC code simply because the employee believes it is wrong.

The employee needs to correct their underlying tax position with HMRC, after which the employer can apply the updated coding instruction.

Fusion’s payroll services for small businesses can support employers with PAYE payroll, HMRC reporting, employee tax codes, P45s and P60s.

How to check whether your tax code is correct

Start by comparing the tax code on your payslip with the details HMRC currently holds.

You can use HMRC’s check what your tax code means tool to see:

• what the numbers and letters mean;
• how the code affects your tax;
• the deductions included in the calculation; and
• what action may be required.

You will normally need your tax code, estimated annual income and details of relevant benefits or State Pension.

Also check whether HMRC’s estimate of your annual income matches what you realistically expect to receive.

What should you do if your tax code is wrong?

If something in the tax-code calculation does not match your circumstances, update the underlying information rather than trying to change the letters or numbers yourself.

You can use HMRC’s check your Income Tax for the current tax year service to review and update information including:

• income from jobs and pensions;
• employer or pension provider details;
• changes affecting the tax code; and
• estimated income.

HMRC will normally tell your employer or pension provider when a new code needs to be used.

If you have already paid too much or too little tax, the way it is corrected will depend on your circumstances and whether HMRC can make the adjustment through PAYE.

Tax-code checklist

If a tax code looks unfamiliar, check these points before assuming there is an error:

• Is the code attached to your main job, second job or pension?
• Is your Personal Allowance already being used elsewhere?
• Have you recently changed jobs?
• Have you started or stopped receiving a company benefit?
• Has your State Pension or other pension income changed?
• Has your estimated annual income changed?
• Does HMRC know about all of your current employments?
• Does the code include W1, M1 or X?
• Does the code have an S or C prefix because you are a Scottish or Welsh taxpayer?

A tax code is only one part of your tax position. If the code does not reflect your circumstances, deal with the underlying information promptly rather than allowing an incorrect deduction to continue across several payslips.

Need help with tax codes or payroll?

Fusion Accountants can help UK employers and directors manage PAYE payroll, apply HMRC coding notices correctly and keep employee payroll records up to date. Get payroll support

This article provides general information and does not constitute accounting, tax or legal advice. Tax codes depend on individual circumstances. Check your current HMRC information or obtain professional advice if you are unsure.