tax code calculator

Free Tax Code Calculator

Check if you're owed a rebate

It looks like an innocuous set of digits, but your tax code can have a big impact on your finances. Every year, millions of people are hit by errors – and some are due £1,000s back. Use our Tax Code Calculator to check your code's right. If it's wrong, read on to see how to deal with underpaid or overpaid tax.
 

Calculator showing 1257L tax code and text "check your tax code"

1-min read to check your tax code

Use this summary and the links to our calculator if you know what you're doing. Alternatively, read our full guide below for detailed help.  
 

Thanks to Tony Tesciuba (Tesciuba Ltd) and Matthew Brown (Chartered Institute of Taxation) for feedback/suggestions. While every effort's been made to ensure accuracy, this guide isn't authorised, tailored tax advice (get help here). We can't take responsibility nor accept liability for damage or losses; you use the info at your own risk.

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The Tax Code Calculator

If you already know your tax code, use our calculator below to get a ROUGH idea of whether it's correct (it's impossible to be exact). If it seems wrong, it could be worth taking action to check whether you're owed (or owe) cash.

Got one employer, no work perks, live in England/Northern Ireland and earn under £100,000? Your 2021/22 code should be 1257L (S1257L in Scotland and C1257L in Wales).

What is a tax code?

On the face of it, a tax code is a dull and harmless series of numbers and letters – 1257L, S1257L, C1257L, BR and K497 are just some examples for the current tax year.

But these hieroglyphics are used by your employer to calculate the amount of tax that should be deducted from your wages or pension before they hit your bank account.

Therefore if you pay tax through the pay-as-you-earn (PAYE) system, the tax code tells your employer or pension provider what it should take – and even small errors can lead to mistakes of £100s.

So the aim here is to find your tax code and decipher what it means, to see if it's correct. But it's worth knowing that not everyone has a tax code...

Who has a tax code?

Full or part-time employees

Those receiving a private pension

Who doesn't?

Fully self-employed or unemployed people

Those ONLY receiving a state pension

How do I find my tax code?

Taking on your tax code is not an appealing task for even the most dedicated MoneySavers. But it doesn't have to be that gruelling. The most important thing to remember is...

Each income you have (jobs, private pensions) will have different tax codes. Remember to check them all!

Here are the best places to look for your tax code...

  • Your payslip. Perhaps the easiest place to look is on your payslip, which you'll receive from your employer every time you get paid.

  • Your PAYE coding notice (or P2). It's sent to you around March, just before the start of the tax year. It explains to you how this code was generated.

  • Your P45. This is the form your employer gives you when you stop working for it – and the one you give to your new employer when you change jobs.

  • Your P60. This is an annual summary of your salary and the tax that's been deducted. Your employer is required to give you this at the end of each tax year.

  • Pension advice slip. If you're receiving a private pension, the easiest place to find your code will be on any pension advice slip or on your P60 sent once a year.

  • HM Revenue & Customs (HMRC). If you can't lay your hands on any of these, you can check your tax code with HMRC online. You'll need to create an account or sign in with your Government Gateway/Gov.uk Verify ID if you already have one.

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What your tax code means

Tax codes are made up of two main elements, which determine the amount of tax your employer will take. If you work for multiple employers (or work and also draw a pension), you'll have more than one code.

Your tax code will usually be made up of letters and numbers. Here's an example of a common tax code for the current tax year (similar ones for past years include 1250L, 1185L and 1150L):

illustration

The letters and numbers indicate different things...

  • The numbers. These three or four digits indicate what your tax-free allowance is – that's the amount you can earn in a year before your employer needs to deduct tax. The size of this allowance depends on your income and whether there are any deductions (eg, company car) or additions (eg, pension contributions) to this.

    You need to add a zero to get the real number, so 1257 means you can earn £12,570 a year tax-free. This is called your personal allowance. Above that, you pay tax on income, though the amount you pay depends on your total earnings (see current tax rates).

  • The letter(s). A number of different factors dictate the letter(s) you see, and you should use our Tax Code Calculator to check that the definitions are relevant for you.

    The letters usually refer to the rate at which your employment income is being taxed and whether you have any unusual circumstances. Usually, the letters come at the end of your tax code, but those who live in Scotland will see an S at the start, and those in Wales a C as well as the letters at the end.

    Letters you may see at the end of your tax code include L (the most common), BR, T, N, and M, along with a few others. But there are lots of different letters and combinations of letters, so use the calculator to see what they all mean (and check that they should apply to you). You can also see a full list on Gov.uk.

How to find what your tax code should be

First, check the number's correct. HM Revenue & Customs works it out like this:

Your personal allowance – any deductions = number in your tax code

If you have benefits at work, you may have some deductions. Common ones include discounted rent or household bills, vehicle use, medical insurance, healthcare cash plans, some travel costs, payment in vouchers, and goods bought on company credit cards. 

These deductions are subtracted from the total amount of tax allowances you get (probably your basic personal allowance), and what's left is the total amount of tax-free income you are permitted in each tax year.

HM Revenue & Customs (HMRC) then removes the last digit of this number (so you get 1257 in the case of the 2021/22 standard £12,570 personal allowance) – and hey presto, you've established the number part of your tax code.

In the majority of cases, these numbers will be followed by a letter. And this letter will vary according to your particular circumstances, so it's important to check the letter's correct too.

Why has my tax code changed?

The HMRC slogan that "tax doesn't have to be taxing" is well intentioned, but rarely true. If your code's not the standard 1257L, click on any of the following statements that apply to you – it may explain any discrepancies in the code. 

Check if any of the following apply...

  • The amount of tax you pay is based on your total income for the tax year – whether this is from one, two or more jobs, interest on savings, or rental income from a second property that you own. But you will still only have one personal allowance (the amount you can earn before tax) for all of them.

    You'll be issued with a separate tax code for each job – and these are likely to be different. For example, if your main income does not take you above the basic 20% rate of tax, you may be on a 1257L tax code for your main job and a BR code for your second job.

    Or if you work four days a week in one job and earn £50,000, and have a second job paying £30,000, your tax code could be 1257L for the first job and D0 for the second job, because the £30,000 earnings will be taxed entirely at the higher rate of 40%.

    It's important to ensure HMRC knows which is your MAIN job (generally the one that pays you most) as if it's the wrong way round, it can cause problems.

    Your PAYE coding notice (also known as a P2) should tell you what each tax code is for each job and how it was worked out. If it's unclear, call HMRC on 0300 200 3300 to get some answers.

    How to use the calculator with multiple jobs...

    • Put each code in the calculator separately, ideally starting with your main job, ie, the one that pays you the most.

    • Your overall personal allowance is the sum of allowances from all the tax codes you have. For example, if you have tax codes 300L and 250L, the tax-free allowance given to you by your tax codes is £5,500.

    • Add up the personal allowances given to you by your tax codes. If these aren't equal to the allowance that your age and salary predict for you (the calculator lists this), it's worth taking things further.
  • The marriage tax allowance allows non-taxpayers to transfer £1,260 of their personal allowance (the amount you can earn tax-free each tax year) to their basic-rate tax-paying spouse or civil partner.

    This is done by adjusting the tax code of both partners. In addition to the number changing, you'll also see an N or an M at the end of your tax code instead of the standard L. 

    For full info, including how to claim if you've not yet done this, see Marriage Tax Allowance

  • If your employer requires you to work from home, you've always been able to claim for increased costs, eg, heat or electricity, for the specific time at home. Yet during the pandemic, HMRC allowed you to claim a whole year's tax relief, even if you only needed to work from home for a day during the tax year. That now applies for the new 2021/22 tax year too. 

    If you've claimed this allowance, your tax code will be adjusted upwards so you pay less tax. 

    For full info, including how to claim if you've not already done so, see Martin Lewis's Working-from-home tax relief blog. 

  • If you qualify for the full personal allowance (£12,570 in 2021/22) and were born before April 1948, you used to have a boosted allowance, and so the letters P or Y were tagged on to the end of the numbers in your tax code.

    However, as the personal allowance for everyone is now £12,570, it's likely your tax code will be 1257L.

    The last tax year that a P code was used was 2014/15, and the last tax year a Y code was used was 2015/16.

    Income from state pensions will also be subtracted from your personal allowance. If your total taxable deductions exceed the personal allowance, you'll have a negative coding – where a K is used.

  • Claiming any of these benefits WON'T make any difference to your tax code.

    Universal credit and working tax credit are classified as 'means-tested' benefits, so are not deducted from your individual personal allowance. See our full Universal Credit and Tax Credit guides.

    Child benefit was withdrawn from some higher earners in January 2013, with people earning between £50,000 and £60,000 a year only remaining eligible for a portion of it, and those earning £60,000 or above not eligible at all.

    If this is you, you can still claim child benefit, though it must be repaid at the end of the year. You can also choose to pay through your tax code, which will lower your personal allowance. You'll also have to fill in a self-assessment tax return.

  • This is where things can get complicated. The letter after your numbers – which will be your total personal allowance with the last digit removed – could be an L or a T.

    Which it is depends on the value of the taxable benefits, such as company cars, dental care, private healthcare, mobile phones, vouchers or laptops.

    If you're a higher-rate taxpayer (earning more than £37,700, or more than £31,093 in Scotland, above your personal allowance in 2021/22) or an additional-rate taxpayer (earning over £150,000), and have the perks to match, you are likely to be on the T code, denoting that your tax affairs need regular review.

  • High earners lose some of their personal allowance – for every £2 you earn above £100,000 a year, your personal allowance decreases by £1. An example may help...

    Anna earns £110,000 a year. As she earns £10,000 over the £100k threshold, her personal allowance decreases by £5,000. Her new personal allowance is £7,500.

    Because the number in your tax code usually depends on your personal allowance, earning over £100k generally means that this number changes.

    Assuming Anna has a standard L letter in her code, and no other changes to her personal allowance, her code would be 757L.

  • If you've been working overseas and paying tax to a different country, you should be put on the tax code that reflects your new earnings and position as soon as you return to the UK and start working again. For example, if you qualify for a basic personal allowance of £12,570, you should be put on the standard tax code of 1257L.

    However, a code of BR (with no numbers) or something looking like 1257L X, 1257L M1 or 1257L W1 may also be used if you've started a new job and haven't completed a starter checklist before your first payday.

    But if there are still tax issues hanging over from the country you had previously been working in, you may find you are put on a T code, which indicates that your tax position is not settled and will need to be reviewed regularly by HMRC.

  • If you've just left education and are going into your first job, you should be put on the tax code that reflects your earnings and position. For example, if you qualify for a basic personal allowance of £12,570, you should be put on the standard tax code of 1257L.

    However, a code of BR (with no numbers) or something looking like 1257L X, 1257L M1 or 1257L W1 may also be used if you've started a new job, don't have a P45 and haven't completed a starter checklist before your first payday.

    Sometimes it can take a month or so for HMRC to get you into its system and on to the right tax code. But any tax you have overpaid should come back to you automatically in your next wage packet. If not, chase up HMRC.

  • If you took time out from your job to have a family and are going back into work, you should automatically be put on the tax code that reflects your earnings and position. For example, if you qualify for a basic personal allowance of £12,570, you should be put on the standard tax code of 1257L.

    However, a code of BR (with no numbers) or something looking like 1257L X, 1257L M1 or 1257L W1 may also be used if you've started a new job and haven't completed a starter checklist before your first payday. Even if you can lay your hands on it, your last P45 won't be any good to you now as it's only valid for the current tax year.

What to do if your tax code's wrong

Now you understand what your tax code means, you'll be able to assess whether it's likely to be correct for your earnings, age and situation. If your tax code doesn't look right, it probably isn't.

The onus is on you to get on the right tax code. We now have two possible scenarios, and one is much more fun than the other. If you've overpaid tax, read on. If you've underpaid, skip to the "I've underpaid" tax help.

I've overpaid tax – how do I get my cash back?

If your tax code is wrong...

The first thing to do is to tell HM Revenue & Customs (HMRC) you think your tax code may be wrong, and why.

It's probably simplest to call HMRC on 0300 200 3300 so you can resolve your situation with a human and ask questions along the way. Alternatively, you can contact HMRC online via your personal tax account to let it know your tax code is wrong – you'll need to log in/set up an account using your Government Gateway or Gov.uk Verify ID.

Here's some inspiration from a MoneySaver who queried the amount of tax they were paying...

I want to thank you – you recently stressed the importance of checking your tax code. After I was recently made redundant, I got my P45 and phoned HMRC. I said: 'Look, can you just check this for me?' They checked a couple of things, said: 'Can you stay on the line?', then said: 'We owe you £11,486 – how would you like it paid?' The cheque arrived 10 days later.

I had just trusted the amount of money HMRC had taken off my redundancy pay – then my instinct kicked in after your warnings. This success has allowed us to clear our debts and plan for the future.

Tina, via email

How and when will I be repaid?

This depends on the tax year your claim refers to. If it's the current tax year and you're paying too much tax as a result of your tax code right now, HMRC will inform your employer, the tax code will be amended and the overdue tax will be refunded to you via your wages.

After the end of the tax year, HMRC will send you a P800 (or in some cases a 'simple assessment' letter). If you're self-employed or if the tax refund refers to previous tax years, you'll be able to claim your refund online (your P800 will tell you if you can) or HMRC will send a cheque in the post.

In some cases, HMRC will pay a paltry rate of interest on any tax you have overpaid – since September 2009, you earn 0.5% on overpaid tax.

How far back can I claim?

As we say above, HMRC will adjust your tax code for the current year to correct errors. If the problem has been going on longer, you can claim back up to FOUR additional years of overpaid tax. This means you can go back as far as the 2017/18 tax year.

However, even if the deadline has passed for the tax year in question, don't let this put you off getting back what's yours. In certain circumstances – including when HMRC is at fault – your claim will be considered. So fight your corner.

Quick questions

  • In summer 2010, errors started coming to light and MORE THAN 30 MILLION mistakes for the tax years between 2003/04 and 2015/16 were uncovered by HMRC.

    People pay the wrong amount of tax because they've changed jobs midway through the tax year, or they've retired, or some other change.

    Commentators often point the finger at HMRC, though many tax nerds dispute this, saying its reconciliation at the end of each year reveals errors – but didn't create them. Current employers can only use the tax code they are told to use, so the key is having correct info flowing through the system.

  • The errors are indiscriminate, but some groups of people are likely to be more affected than others. You should take action quickly if one of the following situations has applied to you in the recent past.

    • Changed jobs? The tax system can incorrectly assume you have two jobs if your former employer hasn't let HMRC know you've moved on.

    • Have more than one income? If you've been earning money from more than one source (eg, you have a second job), you could find you've been taxed incorrectly on a chunk of your earnings.

    • Receive employee benefits? If part of your salary is made up of company benefits such as a company car, healthcare cash plan or medical insurance, it's possible you're being taxed wrongly.

    • Just started your first job? Young people embarking on first jobs in the middle of a tax year can easily be shunted on to an emergency tax code. Never assume the amount you receive in the first few pay packets is correct.

    • Have more than one pension or recently retired? If you receive money from more than one pension source, have retired in the last couple of years or have recently started to receive the state pension, you could have been taxed erroneously.

Please report successes/failures getting money back in the Tax Code Calculator successes forum discussion.

illustration

I've underpaid tax – what happens now?

In most cases, you'll have to pay it back – generally HMRC can only go back four tax years, but this extends to six years if you acted carelessly and 20 years if you acted deliberately.

How you go about paying what you owe depends on the amounts involved and how HMRC has dealt with your case – though it's always important to check you agree with HMRC about how much tax you've underpaid.

But it wasn't my fault I'm on the wrong code!

The official line from HMRC is that it is each individual's responsibility to check they are on the right tax code.

However, if your code was wrong there are some situations where you might not have to pay the tax bill. This could include:

  • If your employer made a mistake and put you on the wrong tax code despite being sent the correct one by HMRC. In that case, HMRC should try first to recover the tax from your employer.
  • If HMRC reviews your tax and finds an underpayment of £50 or less in the last year, it'll write off the tax.
  • If the underpayment was made in a tax year ending more than a year ago, you may be able to challenge via the not-so-catchy name of an extra-statutory concession – or an A19 (read more about this on Gov.uk and below).

See the Low Incomes Tax Reform Group's guide on underpaid tax for more.

How to reject underpayments more than a year old

Using an A19 – a little-known clause that lurks deep in HMRC's complex book of rules –ISN'T guaranteed, and in fact it's far from likely to work. But there is a possibility, so it may be worth giving it a go.

  • To even think about going down this route, you must strictly fulfil the following criteria:

    • The underpayment is more than 12 months old.
    • HMRC was given the CORRECT information.
    • Lastly, you will need to demonstrate a 'reasonable belief' that your tax affairs were in order, which can be tricky – if you suddenly started receiving loads more pay, it can be argued you should have spotted it!

    This means that at present, if you underpaid in the 2019/20 tax year or earlier you may be able to go the A19 route.

    You will also need to have all your paperwork and dates in perfect order.

    You can apply for an exemption under an A19 simply by calling or writing to HMRC.


    You can download template letter here to help if you plan to write to HMRC.

    With thanks to the Low Incomes Tax Reform Group.
     

    This is definitely worth a go if you qualify, though remember – it's far from a sure thing. But we have received emails telling us of successes – one MSE user had a £1,700 repayment written off after HMRC didn't follow procedures properly.

    I am delighted to tell you that my underpayment (£1,700) has been written off under the A19 ruling. The underpayment HMRC had already started deducting from my pension has been refunded.

A19 doesn't apply to me – I have to repay. How do I do that?

If you do owe the tax HMRC claims you do, you will have to repay. But the good thing is you don't have to repay it all at once. For smaller amounts, you can pay through your tax code over the next year. And for larger amounts, you can agree a repayment plan with HMRC.

Quick questions

  • Any underpayments for the tax year immediately before won't be requested if they are £50 or under (you likely won't even be aware of this, as HMRC won't contact you if you owe £50 or less).

    If you do need to make a payment, you won't have to pay it all back in one go – you can call HMRC and arrange a payment plan instead. This usually involves it taking instalments from your earnings through your tax code.

  • That will depend on the amount you owe... 

    • If less than £3,000, HMRC may simply adjust your tax code at the start of the new tax year to claw back the sum you owe. For example, if you'd underpaid £300 during the last tax year, you would need to be taxed on an additional £1,500 of income (if you're a basic 20% rate taxpayer) over the next tax year to repay this sum.


      This means £1,500 would need to come off your personal allowance for the next tax year. Assuming you have the standard tax code of 1257L, it would be adjusted to read 1107L (12,570 minus 1,500 with the last digit removed).

      If that happens, ensure you do a full budget (see our free Budget Planner) to factor in having less disposable income.

    • If more than £3,000, HMRC will send you a bill regardless of the point in the tax year and give you 30 days in which to cough up. If you cannot make the payment, don't worry – you can call HMRC and arrange a repayment schedule.

    In cases where the underpayment is serious – for example, you have a couple of rental properties you have not declared income on – you may be required to enter the self-assessment system and may have to pay interest and fines.

    For more information, read HMRC's 'Time to Pay' guidance and what to do if you're in difficulties.

  • In this case, you should inform HMRC of your hardship (and be able to back it up).

    In extreme cases, the underpayment could be wiped. One example might be if your underpayment came from a past salary, and you're now retired, earning only the state pension. It's unlikely for most people, but worth discussing – see the tax help agencies at the end of this guide.

Keep an eye on future codes

With any luck, once you have established the right tax code, it'll all be sorted with HM Revenue & Customs (HMRC) from then on, unravelling the web of complexity surrounding tax codes and what you ultimately should be paying. Yet don't bank on it...

Small changes can alter your code.

Every time your circumstances change – whether it's a promotion at work with a larger salary, new employee benefits, taking on another job, giving up work to have children or leaving the country and the UK tax system altogether – your tax code may change, so it can be worth getting in touch with HMRC to establish your new tax code.

Updating your details today can save an awful lot of hassle and expense in future. You can update these details (and others, such as your address) through your Gov.uk personal tax account.

Get free tax help

This guide provides general information about tax codes to help you see if you're on the right track. But it's no substitute for personal advice if you need it – and you should always take care to ensure you're definite about any actions you're taking.

The following organisations all give help and advice, and some don't charge a fee, so give them a try if you're struggling:

TaxAid: Lots of info is available here, but TaxAid can only help those on a low income who can't resolve their own issues with HM Revenue & Customs.

Citizens Advice: Visit Citizens Advice's website to get the number of your local Citizens Advice bureau.

Low Incomes Tax Reform Group: An initiative from the Chartered Institute of Taxation, aimed at those with low incomes who have tax problems. Visit LITRG.

Tax Help for Older People: If aged over 60, you can try Tax Help for Older People online or by calling 01308 488066.

Find a tax adviser: If you can afford it and have more complex affairs, you can use the Chartered Institute of Taxation's 'Find a Tax Adviser' search.

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