Tax Code 1257L Explained: What It Means and What You Actually Take Home

What does tax code 1257L mean?

Tax code 1257L tells your employer or pension provider that you are entitled to the standard tax-free Personal Allowance of £12,570 for the tax year. It is the code most employees and pensioners are on, which is why it is the one people search for most.

The code has two parts. The number, 1257, is your tax-free allowance divided by ten and rounded down. The letter, L, means you are entitled to the standard Personal Allowance. Put together, you can earn £12,570 before Income Tax starts. You can read the wider picture in our Personal Allowance guide.

How much tax do you pay on 1257L?

Nothing on the first £12,570 of taxable income, then 20% on the next slice up to £50,270 (the basic rate band is £37,700). The table shows the Income Tax only for an employee in England, Wales or Northern Ireland, before National Insurance, pension contributions or a student loan.

What the allowance looks like on your payslip

Payroll spreads your allowance across the year. On a 1257L code you get £1,047.50 of tax-free pay each month, or about £241.73 each week. Anything above that in the pay period is taxed at 20% until you reach the higher rate threshold.

To see the figures for your own pay, try the PAYE tax calculator or look at the £30,000 and £35,000 after tax pages. If you are unsure which lines on your payslip matter, our payslip guide walks through them.

Other tax code letters you may see

The number changes with your allowance, and the letter changes with your circumstances. These are the ones people meet most often:

Is 1257L an emergency tax code?

On its own, no. 1257L is the normal code. It becomes an emergency code when it carries W1, M1 or X after it, for example 1257L W1. That means your employer is working out tax on a non-cumulative basis, giving you one pay period of allowance at a time rather than looking at the year as a whole.

Emergency codes are common when you start a new job without a P45, or when HMRC doesn't yet have your details. You are not charged more tax for the year, but you can be taxed too much early on. Once HMRC sends your correct code, any overpayment is normally refunded through payroll. Our guide to the P45 explains why that form matters when you change jobs, and emergency tax codes explained covers BR, 0T, W1 and M1 in detail.

Why your tax code might not be 1257L

If your code is lower than 1257L, HMRC is usually taking back tax through your code. The usual reasons are:

• A company car, private medical insurance or another taxable benefit. See our benefit in kind guide.
• A second job or pension, where the allowance is used up on the first one. Our guide to tax on a second job shows how this works.
• Tax you underpaid in an earlier year, collected gradually through your code.
• Income over £100,000, where the Personal Allowance starts to shrink. We cover this in the £100,000 tax trap.
• Marriage Allowance, which can raise or lower the code by £1,260 of allowance. Read how Marriage Allowance works.

What to do if your tax code looks wrong

Check your code in your HMRC online account or the HMRC app, where you can see how it was worked out and update estimated income or benefits. If the details are right but the code is still wrong, contact HMRC. You can't change a tax code through your employer, because HMRC issues it.

Ask your employer to check the code on your payslip against your tax code notice, and keep both. If you have overpaid, HMRC will usually correct it through payroll or send a refund. For a quick look at what you should be taking home, run your figures through the take-home pay calculator.

Scotland and Wales

The S and C prefixes show that Scottish or Welsh Income Tax rates apply to your pay, while the allowance is still £12,570. Scottish bands differ from the rest of the UK, so use the Scotland tax calculator if you are a Scottish taxpayer. Welsh rates currently match England's, and the Welsh Income Tax calculator shows how the bill is split between governments.