Your tax code, decoded

Your tax code tells your employer or pension provider how much of your income to give you tax-free before deducting Income Tax. Get the wrong code and you can quietly overpay for months, or build up an unexpected bill.

What the numbers mean

The numbers are your tax-free amount for the year, divided by ten. The most common code reflects the standard £12,570 Personal Allowance, the income you can usually earn before paying tax. A higher number means more tax-free pay; a lower one means less.

What the letters mean

The letter is a shorthand for your situation. 'L' is the standard allowance. 'BR' means all that income is taxed at basic rate (often a second job). 'K' means deductions outweigh your allowance, for example a taxable benefit like a company car. 'M' and 'N' show a Marriage Allowance transfer in or out.

When codes go wrong

Codes drift after a job change, when you start a second income, or when a benefit ends but HMRC hasn't caught up. An emergency code (often ending 'W1' or 'M1') is a temporary guess used until your details settle. Any of these is worth a quick check.

How to check yours

Your code is on your payslip, your P60, and in your Personal Tax Account on gov.uk, where you can also see how it was worked out and tell HMRC if something looks off. This is general information, not personal tax advice.