What does my tax code mean?
What the number and the letters mean, the codes that suggest a problem, and how to get it corrected.
- Difficulty
- beginner
- Time
- 20 min
- Read
- 2 min
- Safety
- caution
Short answer
The number is roughly your tax-free allowance divided by ten; the letters describe your situation. Codes ending in W1, M1 or X are emergency codes and usually mean you are paying more than you should.
A tax code is instructions from the tax authority to your employer about how much to deduct. It is generated automatically from information that is often incomplete, which is why wrong codes are common — and why checking yours matters.
Safety
Step by step
- Read the number as your allowance.Multiply by ten for the approximate tax-free amount for the year. A standard code corresponds to the basic personal allowance.
- Understand the common letters.L is the standard allowance. BR means everything is taxed at basic rate, usually for a second job. D0 and D1 are higher rates. NT means no tax. K means deductions exceed your allowance.
- Watch for emergency codes.W1, M1 or X after the number means it is being applied on a non-cumulative basis — each period taxed in isolation. It usually results in overpayment and should correct itself, but does not always.
- Understand a K code.It means untaxed income or benefits exceed your allowance, so an amount is added to your taxable pay rather than deducted. Common with company cars or unpaid tax from a previous year.
- Check it whenever anything changes.New job, second job, benefits starting or ending, a company car, a change in circumstances. These are when codes go wrong.
- Check the coding notice.The tax authority sends one explaining how the code was calculated. It shows the assumptions used, which is where the error usually is.
- Contact the tax authority if it looks wrong.You can contact them directly, or use their online account to check and correct the information behind the code. Your employer cannot change it on request — they apply what they are told.
- Claim back an overpayment.Overpaid tax is usually refunded automatically after the tax year ends, but you can claim earlier. It can be reclaimed for several previous years.
Tips
- A second job commonly gets a BR code, taxing all of it at basic rate. That may be correct or may not — check whether your allowance is allocated where it does the most good.
- Your employer cannot fix your tax code. They apply what the tax authority tells them, so the correction has to come from the authority.
- Check your code at the start of each tax year. It is when codes are reissued and when errors are introduced.
Questions people ask
What does an emergency tax code mean?
Codes with W1, M1 or X apply tax on each pay period in isolation rather than cumulatively. It usually means paying too much, and it should correct once the authority has full information.
How do I get my tax code corrected?
Contact the tax authority directly or use your online tax account. Your employer applies the code they are given and cannot change it themselves.