How Do I Know If I’m on the Right Tax Code

Understanding what a tax code is

A tax code tells your employer or pension provider how much tax-free income you are entitled to before tax is deducted from your pay. HMRC issues tax codes based on your personal circumstances, including your income, benefits, and any adjustments for previous years.

Most employees in the UK receive a tax code each year that reflects their Personal Allowance, which is the amount you can earn before paying income tax. For the 2025 26 tax year, the standard Personal Allowance remains £12,570, which is usually shown as the tax code 1257L.

If you have more than one job, receive a pension, or claim benefits, HMRC may issue a different code to make sure the correct tax is collected overall.

How to find your tax code

You can find your current tax code in several places:

On your payslip, usually next to your National Insurance number

On your P45 (if you’ve left a job) or P60 (end-of-year summary)

In your Personal Tax Account on the HMRC website

If your payslip shows a code different from 1257L, it’s worth checking what it means and whether it’s correct for your situation.

What the numbers and letters in a tax code mean

Tax codes use a mix of numbers and letters to show how much tax-free income you get and any special tax circumstances.

Numbers: These represent your tax-free allowance. Multiply the number by 10 to find the amount you can earn before tax. For example, 1257 means a £12,570 allowance.

Letters: These indicate how the code should be applied.

Here are some of the most common:

L Standard tax-free Personal Allowance.

M You receive part of your partner’s unused Personal Allowance (Marriage Allowance).

N You have transferred part of your Personal Allowance to your partner.

T Your tax code includes other calculations or restrictions.

BR All your income is taxed at the basic rate (usually for a second job).

0T You have no tax-free allowance (often temporary until HMRC updates your details).

D0 All income is taxed at the higher rate (40%).

D1 All income is taxed at the additional rate (45%).

K You owe tax from previous years or receive taxable benefits that reduce your allowance.

How to tell if your tax code is correct

The easiest way to know if your tax code is right is to compare it with your situation.

If you:

Have one job and no benefits, your tax code is likely 1257L.

Have two jobs, one may have a BR or 0T code so that all income from that role is taxed.

Receive a company car, private medical cover, or other taxable benefits, your code may include adjustments or a T or K prefix.

Claim Marriage Allowance, your code should include M or N depending on whether you receive or transfer it.

If your code does not match your circumstances, or if you notice an unexpected change, contact HMRC to check.

Common reasons for wrong tax codes

There are several reasons your tax code might be wrong or outdated:

You started a new job and your employer used an emergency code temporarily

You have more than one source of income and HMRC hasn’t allocated allowances correctly

You stopped receiving a taxable benefit, such as a company car, but your code wasn’t updated

You claimed expenses or allowances that haven’t yet been applied

HMRC is adjusting for unpaid tax from a previous year

Even a small change in your circumstances can affect your tax code, so it’s worth checking regularly.

How to check your tax code with HMRC

You can view your current and past tax codes in your Personal Tax Account on the HMRC website. This service lets you:

See how your tax code is calculated

Check your income and benefits information

Update your employer details or address

Tell HMRC if something has changed

You can also call HMRC’s Income Tax helpline if you think your code is wrong or if you do not have online access. Have your National Insurance number and recent payslip ready before calling.

What happens if you’re on the wrong tax code

If your tax code is wrong, you might be paying too much or too little tax.

If you’re overpaying:
HMRC will usually refund the extra automatically through your wages, pension, or a direct payment after reviewing your records.

If you’ve underpaid:
HMRC will normally adjust your tax code for the next year so you repay the amount gradually. In some cases, they may issue a direct payment request.

In both cases, it’s best to check early rather than wait for a year-end reconciliation.

How to fix a wrong tax code

If you notice a problem, contact HMRC as soon as possible. You can do this through your online account or by phone. Provide details such as your employer’s name, PAYE reference, and your recent payslip.

HMRC will review your records and issue an updated tax code to your employer. You’ll receive a PAYE Coding Notice confirming the change. Once your employer applies the new code, your future payslips should reflect the correction.

How emergency tax codes work

If you start a new job and your employer doesn’t yet have your P45, they may apply an emergency tax code such as 1257L W1, M1, or X.

These codes apply your tax allowance on a week-by-week or month-by-month basis instead of spreading it over the year. This can cause overpayments, but once HMRC receives your full details, your tax code should be updated and any overpaid tax refunded automatically.

When to review your tax code

You should review your tax code whenever your circumstances change, such as when you:

Start or leave a job

Begin receiving a company car or other benefit

Start drawing a pension

Get married or divorced

Move from employment to self-employment

Begin receiving new income such as rental payments or freelance work

Checking once or twice a year is also a good habit, even if nothing changes.

Understanding adjustments in your code

Sometimes HMRC adjusts your tax code to collect or repay tax owed. For example, if you had a small underpayment from the previous year, your code may include a deduction to recover it gradually.

Similarly, if you received too much tax relief, HMRC might reduce your allowance. The explanation on your PAYE Coding Notice will show how these adjustments have been calculated.

Keeping your details up to date

The best way to avoid tax code errors is to keep HMRC informed of changes as they happen. Update them when you change jobs, move home, or start receiving new income sources. Employers also play a role by submitting Real Time Information each pay period, so accurate records on both sides keep your tax right.

Final thoughts

Your tax code directly affects how much you take home each month, so it’s worth understanding what it means.

By checking your payslip and HMRC online account regularly, you can spot errors early and correct them quickly. If your code doesn’t match your situation or you’re unsure what it means, contact HMRC for clarification.

Being on the right tax code keeps your finances accurate, avoids unexpected bills, and ensures you’re paying exactly what you owe — no more and no less.