Tax Codes

Check if your Tax Code is Correct 

Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension.

HM Revenue and Customs (HMRC) will tell them which code to use to collect the right tax.

You can check your Income Tax online (external link) to see:

  • what your tax code is 

  • if your tax code has changed 

  • how your tax code is worked out 

  • how much tax you’re likely to pay 

You can also tell HMRC about a change that affects your tax code (external link).

What your Tax Code Means 

Your tax code will normally start with a number and end with a letter.

1250L is the tax code currently used for most people who have one job or pension.

How the Numbers are Worked Out 

The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year.

  1. HMRC works out your tax-free Personal Allowance (external link)

  2. Income that you have not paid tax on (such as untaxed interest or part-time earnings) and the value of any benefits from your job (external link) (such as a company car) are added up. 

  3. The income that you have not paid tax on is taken away from your Personal Allowance. What’s left is the tax-free income you are allowed in a tax year. 

  4. The last digit in the tax-free income amount is removed. 

What the Letters Mean 

Letters in your tax code refer to your situation and how it affects your Personal Allowance (external link).

If your Tax Code has ‘W1’ or ‘M1’ at the End 

These are emergency tax codes (external link).

If your Tax Code has a ‘K’ at the Beginning 

Tax codes with ‘K’ at the beginning mean you have income that is not being taxed another way and it’s worth more than your tax-free allowance.

For most people, this happens when you are:

Your employer or pension provider takes the tax due on the income that has not been taxed from your wages or pension - even if another organisation is paying the untaxed income to you.

Employers and pension providers cannot take more than half your pre-tax wages or pension when using a K tax code.