Tax Code Calculator
Your tax code tells your employer how much tax-free income you are entitled to receive before income tax is deducted. Our tax code calculator explains what your current code means, checks whether you are on the right code, and estimates the impact of an incorrect code on your monthly pay — so you can spot underpayments or overpayments before they become costly.
Tax Code Calculator
Decode your PAYE tax code and check you are on the right code for 2026/27.
What Is a Tax Code and Why Does It Matter?
HMRC issues every employed taxpayer a tax code, which your employer uses to calculate the right amount of PAYE income tax to deduct each pay period. The most common code in 2026/27 is 1257L — the number 1257 represents your tax-free Personal Allowance of £12,570 (divide by 10 to get the allowance), and the letter L means you are entitled to the standard allowance.
An incorrect tax code means you are paying either too much or too little tax. HMRC will eventually collect any underpayment, often as an unexpected bill in January. Overpayments can be reclaimed but require you to contact HMRC — they are not returned automatically in many cases. Checking your code takes minutes and can save real money.
Common Tax Codes Explained
The letter at the end of your tax code carries specific meaning. L is the standard code for under-65s with the basic Personal Allowance. M and N indicate Marriage Allowance transfers — M means you have received 10% of your spouse’s allowance, N means you have transferred 10% of yours. T indicates your code requires HMRC review. BR means all income is taxed at the basic rate with no allowance — typically used for a second job. D0 means all income is taxed at 40%, and D1 at 45%.
Prefix codes matter too. A K code (e.g. K497) means you owe tax from a previous year or have taxable benefits that exceed your allowances — your employer deducts extra tax each month. A W1 or M1 suffix indicates emergency tax on a week-one or month-one basis, usually applied when you start a new job without a P45.
How a Wrong Tax Code Affects Your Pay
On an annual salary of £35,000, the standard 1257L code gives a monthly tax-free amount of £1,047. If your employer mistakenly uses a BR code instead, you pay 20% on your full monthly salary with no allowance — costing you roughly £209 extra per month, or £2,508 per year. Over-deductions of this size are not uncommon when starting a new job without a P45. If something looks wrong, contact HMRC directly or ask your payroll department to verify the code. You can also check your Take-Home Pay Calculator against your payslip to spot discrepancies.
Frequently Asked Questions
Your tax code appears on your payslip, P60, P45, or any letter from HMRC. You can also check it by logging into your Personal Tax Account on the HMRC website at gov.uk/personal-tax-account.
Contact HMRC directly by phone or via your Personal Tax Account online. You can also ask your employer’s payroll department to raise a query. HMRC will issue a new code notice (P2) and instruct your employer to apply the corrected code from your next pay date.
Tax codes are personal. Differences arise from benefits in kind (e.g. a company car), unpaid tax from previous years, Marriage Allowance transfers, pension income from a second source, or adjustments for self-assessment. Each person’s code reflects their individual tax position.
Code 0T means no Personal Allowance is applied — you pay tax from the first pound earned. This often happens when HMRC lacks the information to issue a proper code, when you start a job with no P45, or when your income exceeds £125,140 and you have lost the entire Personal Allowance.
Yes. HMRC can issue a revised code at any time if your circumstances change — for example, if you receive a company car, have untaxed income, or transfer the Marriage Allowance. Your employer must apply the new code from the next available pay run. Use our Income Tax Calculator to model how a code change affects your monthly net pay.
Enter your tax code exactly as it appears on your payslip or the P2 tax coding notice HMRC sends. Multiply the numeric portion by 10 to find your annual personal allowance — 1257L means £12,570. Letters indicate how tax is calculated: L is standard; M and N relate to Marriage Allowance; K means negative allowance from untaxed income; BR means all income taxed at 20%; D0 means all at 40%. The calculator explains your code in plain English and estimates your likely effective annual deductions. If the result looks wrong — particularly if you have a BR or D0 code on your only employment — contact HMRC through your personal tax account at gov.uk to have the code reviewed.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.