Understanding what tax code 1257L means​

Example of PAYE on tax code 1257L

Let's say you earn £30,000 a year. With tax code 1257L:

• The first £12,570 is tax free, meaning you don't pay any income tax on it.
• The remaining £17,430 is taxed at 20%. So you'd pay about £3,486 in income tax for the year. 

Your National Insurance is separate. That is another deduction, but it’s not linked to your tax code.

If your code says 1257L cumulative, it means your employer calculates your tax based on your total earnings so far in the tax year. If you see W1/M1, it means week 1 or month 1. This means your employer is treating each pay period separately until HMRC confirms your correct code.

It’s common for your code to change when you switch jobs, start getting company benefits, or move into a new tax year.

Could I be due a tax rebate?

If your tax code's wrong, you might've overpaid tax. That means you could be due a refund, sometimes worth hundreds or even thousands of pounds. Common reasons include:

• You've changed jobs during the year
• You've had multiple PAYE jobs at once
• You've claimed expenses that HMRC hasn't factored in
• You or your partner qualify for Marriage Allowance
• You've been put on an emergency tax code

RIFT's experts check your tax code as part of every claim. If you've paid too much, we'll handle the paperwork and deal with HMRC for you, so you get your money back fast through a tax rebate.

What does the L mean in my tax code?

The “L” shows you’re entitled to the standard personal allowance with no special tax adjustments.

Why has my tax code changed?

It can change if you start a new job, get work benefits, claim expenses or update your personal details with HMRC.

Is 1257L a cumulative tax code?

“Cumulative” means your tax is worked out from the start of the tax year. If your payslip says “1257L W1/M1”, that’s an emergency code.

What happens if my tax code is wrong?

You could pay too much or too little tax. Check your payslip and contact HMRC or let RIFT do it for you.

How do I fix my tax code?

You can correct it through your Personal Tax Account or with help from RIFT. We’ll contact HMRC and make sure your code’s right.

What’s the difference between 1257L and BR?

BR means “Basic Rate”. All your income is taxed at 20%, with no tax-free allowance. It’s common for second jobs or temporary work.