What Does Tax Code 1257L Mean?

Tax code 1257L means you get a £12,570 personal allowance. Learn why tax codes change, how to check yours, and if you’re due a tax rebate.

If you’ve noticed 1257L on your payslip, it’s important to understand what it means and how it affects your take-home pay. Tax codes are issued by HMRC to determine how much tax should be deducted from your salary.

This guide explains what tax code 1257L means, why your tax code might change, how to check it, and what to do if you think it’s wrong.

What is Tax Code 1257L?

The 1257L tax code is the most common tax code in the UK. It is used for people who:

  • Have one job or pension.

  • Receive the standard tax-free personal allowance.

  • Have no major deductions (such as company benefits or unpaid tax).

How Much is the Tax-Free Personal Allowance?

Tax code 1257L means you have a £12,570 personal allowance for the 2023/24 and 2024/25 tax years. This means:

  • You don’t pay income tax on the first £12,570 of your earnings.

  • Any income above £12,570 is taxed at 20%, 40%, or 45% depending on your total earnings.

Example: How Tax Code 1257L Affects Your Pay

If you earn £30,000 per year:

  • £12,570 is tax-free.

  • The next £17,430 is taxed at 20%.

  • Total tax = £3,486 per year.

Your employer automatically applies this tax code via PAYE (Pay As You Earn).

Why Has My Tax Code Changed from 1257L to 1157L?

Your tax code can change if HMRC adjusts your tax-free allowance. If your tax code has changed from 1257L to 1157L, it could be because:

  • You have company benefits (e.g., a company car or medical insurance).

  • You owe unpaid tax from previous years.

  • You have multiple income sources (second job, pension, or rental income).

A lower number (e.g., 1157L) means less tax-free allowance, so you pay more tax.

Why is My Tax Code Not 1257L?

If your tax code isn’t 1257L, you may have:

  • A second job (often given BR, D0, or D1 tax codes).

  • Unpaid tax from previous years.

  • Company benefits that reduce your allowance.

  • Marriage Allowance or Blind Person’s Allowance, which increase or decrease your personal allowance.

How Does a 1257L Tax Code Calculator Work?

A tax code calculator estimates how much tax you’ll pay based on your income and tax code. You can:

  • Use HMRC’s online calculator (https://www.gov.uk/estimate-income-tax).

  • Check payslip deductions and compare them to tax bands.

  • Use payroll software or a tax calculator tool.

What Are Tax Codes and Why Are They Important?

A tax code tells your employer how much tax to deduct from your salary. If your tax code is wrong, you could:

  • Overpay tax and be due a refund.

  • Underpay tax and owe HMRC later.

Different Types of Tax Codes

  • 1257L: Standard personal allowance tax code

  • BR: All income taxed at 20% (for second jobs)

  • D0: All income taxed at 40%

  • D1: All income taxed at 45%

  • K Tax Codes: Owe tax from other sources (negative allowance)

  • M & N: Marriage Allowance adjustments

Am I Due a Tax Rebate?

You could be due a tax refund if:

  • Your tax code was wrong for part of the year.

  • You changed jobs and paid emergency tax.

  • You had unpaid leave or gaps in employment.

You can claim a rebate through HMRC’s P800 form or online at https://www.gov.uk/check-income-tax.

How Do I Check If My Tax Code is Correct?

To check your tax code:

  • Look at your latest payslip.

  • Log in to your HMRC personal tax account.

  • Contact HMRC at 0300 200 3300 if you think it’s incorrect.

I Think My Tax Code is Wrong – What Should I Do?

If you believe your tax code is incorrect, take these steps:

  1. Check your tax code letter from HMRC – This explains why your code changed.

  2. Compare it to your circumstances – Do you have extra income, benefits, or deductions?

  3. Contact HMRC – Call or update your details via your online tax account.

Your employer cannot change your tax code – only HMRC can adjust it.

Final Thoughts

1257L is the most common UK tax code, meaning you receive a £12,570 tax-free personal allowance. If your tax code isn’t 1257L, check your tax details to avoid overpaying or underpaying tax.

If you think your tax code is wrong, check with HMRC to ensure you’re not paying too much tax. If you’ve overpaid, you may be due a refund.