A tax code is a set of instructions to your employer's payroll, and 1257L is the standard one because the number is your tax-free allowance with the last digit removed: GOV.UK gives the standard Personal Allowance as £12,570 for the current tax year, which becomes 1257, and the L says you get the ordinary allowance with no adjustments attached.
How the number turns into an allowance
Multiply the number in the code by ten and you have the tax-free pay for the year: 1257 becomes £12,570, 1263 becomes £12,630 and 1250 becomes £12,500, which is why an older code lingering on a payslip quietly gives you the wrong allowance. Payroll then spreads that allowance across the year, so a monthly payslip on 1257L carries a twelfth of it before any tax is charged.
Why you might have a 1231L tax code instead of 1257L
Codes move when something else is in play: a company car or medical insurance reduces the allowance and lowers the number, expenses you claim can raise it, unpaid tax from an earlier year is collected by reducing it, and a second job usually gets BR. A code of 1263L or 1231L is simply the standard allowance adjusted up or down by an amount HMRC has decided applies to you.
What the letters mean, from BR to a tax code ending in T
L is the ordinary allowance. BR taxes everything at the basic rate with no allowance, which is normal on a second job where the allowance is already used by the first. D0 and D1 tax everything at the higher and additional rates. T means the code includes calculations HMRC wants to review, often the taper of the allowance at higher incomes. NT means no tax is deducted at all.
A cumulative tax code, W1 and M1
An ordinary code is cumulative: each payslip looks at the pay and tax for the year so far, which is how an overpayment corrects itself in the next period. A code with W1 or M1 after it is non-cumulative and treats every week or month as though it were the first, so it cannot repay anything you have overpaid until the code is put back on a cumulative basis.
What should my tax code be? What to do if it looks wrong
Check the allowance the code implies against the £12,570 standard, look for a benefit or an underpayment adjustment on your coding notice, and tell HMRC if the reason is out of date. A wrong code does not change what you owe for the year, only what is taken each month, and an overpayment is repaid once the code is right.
Where the numbers on this page come from
The allowance and bands used here are the ones this site computes every figure on: GOV.UK's Income Tax rates page for the current tax year, quoted verbatim in the rules file behind the calculator and re-verified against the live page, with National Insurance taken from GOV.UK's rates and categories page.
Questions people ask about 1257l tax code
What does tax code 1257L mean?
That you have the standard Personal Allowance of £12,570 for the year with no adjustments: the number is the allowance with its last digit removed, and L is the ordinary allowance letter. Payroll spreads it across your pay periods before charging tax.
What tax code should I be on, and is 1257L right for me?
It is right for most employees with one job, no taxable benefits and no unpaid tax from an earlier year. If you have a company car, claimable expenses, more than one job or an underpayment being collected, expect a different number or letter.
What does W1 or M1 after my code mean?
That the code is being applied on a non-cumulative basis: each week or month is treated as the first of the year, so no refund of earlier overpaid tax can come through until the code goes back to cumulative.
What does tax code BR mean?
Basic rate on everything, with no tax-free allowance in that employment. It is the usual code for a second job, where the allowance is already being given against the first, and it is wrong if that first job no longer exists.