P60 Tax Codes Explained: What They Mean and How to Check Yours
Your P60 shows a tax code — but what does it actually mean? And does it affect whether your P60 figures are correct? Here’s everything you need to know about tax codes in the context of your P60.
What is a tax code on a P60?
Field 8 of your P60 shows your tax code at 5 April — the code in use on the last day of the tax year. This is the code your employer was using to calculate your PAYE deductions at year end. It doesn’t necessarily reflect the code used for the whole year if your code changed during the year.
What does the tax code mean?
For most employees the code will be 1257L. Here’s how to read it:
| Part | What it means |
|---|---|
| 1257 | Your personal allowance ÷ 10. So 1257 × 10 = £12,570 tax-free per year. |
| L | You’re entitled to the standard personal allowance. |
Common tax codes you might see on a P60
| Code | What it means |
|---|---|
| 1257L | Standard — full personal allowance of £12,570 |
| BR | All income taxed at 20%, no personal allowance — usually a second job |
| D0 | All income taxed at 40% — usually a third job or high earner |
| K code | Adjustments exceed allowance — often a company car benefit |
| S prefix | Scottish taxpayer — e.g. S1257L |
| Lower number than 1257 | Allowance reduced — could be underpaid tax, company car, or other adjustment |
Does the tax code on your P60 affect the figures?
Yes — the tax code used throughout the year determines how much income tax was deducted. If your code was wrong at any point during the year, your annual income tax figure (and therefore your P60) may be incorrect. Use the free P60 Calculator to check what your tax should have been.
→ Check your P60 figures with the free calculator
How to check your tax code is correct
Check your HMRC Personal Tax Account at gov.uk — it shows your current and historical tax codes and explains any adjustments. If you don’t recognise the reason for a non-standard code, contact HMRC on 0300 200 3300.
Frequently asked questions
Why does my P60 show a different tax code to my payslip?
Your P60 shows the tax code at 5 April — the end of the tax year. If your code changed during the year, the P60 will show the final code, which may differ from codes shown on earlier payslips.
Can a wrong tax code affect my P60?
Yes. If HMRC issued an incorrect tax code and your employer applied it, your annual tax deductions will be wrong, and so will your P60 figures. Contact HMRC to correct the code and request a refund if you overpaid.
What does 1257L W1 or M1 mean on a P60?
W1 (week 1) or M1 (month 1) are emergency code suffixes meaning tax was calculated non-cumulatively — each pay period independently rather than across the year. This can mean overpaying tax. Contact HMRC if you see this on your P60.
What if my P60 shows BR?
BR means all income was taxed at 20% with no personal allowance — correct for a second job, but wrong if this was your main or only employment. Contact HMRC to investigate and claim a refund.
This post is for general information only and does not constitute financial or tax advice.