Tax and payroll
Tax code
The code your employer uses to work out how much income tax to take from your pay, such as 1257L. The number reflects your tax-free personal allowance, and the letters mean particular circumstances.
A plain-English explanation, not financial or tax advice. Rules and rates change, so check your own situation. For free, impartial guidance, try MoneyHelper. Disclaimer.
You'll hear it as
My tax code's changed, so I'm paying more tax this month.
Why it matters to you.
Tax codes go wrong more often than you'd think, especially after a job change or a new benefit. Check yours on your payslip, and contact HMRC if it looks off.
Related terms.
Videos.
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