What the number and letter mean
The number (1257) is your tax-free allowance divided by 10 — so 1257 means £12,570 of tax-free pay for the year. The letter L means you get the standard Personal Allowance with no special adjustments.
Your employer uses the code to work out how much of each pay packet is tax-free, applying roughly one-twelfth of the allowance each month.
Is 1257L correct for you?
For most employees with a single job and no taxable benefits, 1257L is correct. It can be wrong if you have a company car or other benefit-in-kind (which reduces the allowance), more than one job, or underpaid tax from a previous year — in which case HMRC adjusts the code.
Other common codes
Different letters and numbers change how you're taxed.
- BR — all income at the basic rate (20%), common for a second job.
- 0T — no tax-free allowance, often a temporary/emergency code.
- D0 / D1 — all income at higher (40%) / additional (45%) rate.
- K codes — your deductions exceed your allowance (e.g. a large benefit), so tax is added rather than allowance given.
- An 'X', 'W1' or 'M1' suffix means an emergency, non-cumulative code.