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A code HMRC uses to tell your employer how much tax to deduct through PAYE.
Your tax code is a combination of numbers and letters (e.g. 1257L) that tells your employer how much tax-free income you are entitled to in each pay period. The number represents your tax-free amount divided by 10, and the letter represents your situation (L = basic Personal Allowance, K = you have deductions that exceed your allowance, etc.).
This definition is for informational purposes only and does not constitute tax, legal, or financial advice. Rules may change and outcomes depend on your circumstances.
These GOV.UK and HMRC sources provide the official context for this glossary entry. The definition is educational and does not determine your individual tax position.