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A Tax Code is given to every employee and is used by employers and pension providers to work out how much income tax should be deducted from pay and pension.
A Tax Code is issued to every Employee by HMRC. This code is utilised by employers and pension providers to calculate how much Income Tax should be deducted from an individual's pay or pension.
A Tax Code is a series of letters and numbers. The letters indicate special circumstances that affect an individual's tax liability. For example, the letters BR in a Tax Code indicate that all income for this job or pension is taxed at the basic rate. It is usually used if the individual has more than one job or pension. The numbers in a Tax Code indicate the amount of Personal Allowance an individual is entitled to.
The most common Tax Code in the Tax Year 2023/24 is 1257L.
Tax Codes with W1, M1, or X at the end are emergency tax codes. These are used temporarily until HMRC have correct details about what Tax Code an individual should have.
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