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Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension.

HM Revenue and Customs (HMRC) will tell them which code to use to collect the right tax.

What your tax code means

Your tax code will normally start with a number and end with a letter.

1257L is the tax code currently used for most people who have one job or pension.

How the numbers are worked out
The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year.

• HMRC works out your tax-free Personal Allowance.
• Income that you have not paid tax on (such as untaxed interest or part-time earnings) and the value of any benefits from your job (such as a company car) are added up.
• The income that you have not paid tax on is taken away from your Personal Allowance. What’s left is the tax-free income you’re allowed in a tax year.
• The last digit in the tax-free income amount is removed.