What tax code K codes actually means
The code that works in reverse: instead of tax-free pay, a K code adds to your taxable income.
A K code is a negative allowance. Multiply the number by ten and that amount is added to your taxable pay: K500 adds £5,000, so a £40,000 salary is taxed as if it were £45,000 — £10,460.00 of tax instead of £5,486.00. It happens when deductions owed to HMRC (company benefits, underpaid tax, state pension) exceed your £12,570 allowance. One protection applies: PAYE can never take more than 50% of your pay in any period.
- Personal allowance
- Negative — K number × 10 is ADDED to taxable pay
- Applies in
- All UK regions (SK/CK prefixes in Scotland and Wales)
- Calculation
- Cumulative or W1/M1
See this salary on a different tax code → (opens the main calculator pre-filled with K codes)
What does K codes mean?
Most codes tell payroll how much of your pay to ignore before taxing. A K code does the opposite: it tells payroll to invent extra taxable pay. K475 adds £4,750 to the year's taxable income; K900 adds £9,000. This is how HMRC collects tax on money or benefits you receive without PAYE touching them — a company car, medical cover, the state pension, or an old underpayment.
The arithmetic: your untaxed benefits and clawbacks are totted up, your £12,570 allowance is set against them, and if they exceed it, the excess (divided by ten) becomes your K number. A £18,000 company benefit against a £12,570 allowance leaves £5,430 uncovered — code K543.
Because a K code can generate startling deductions, there's a statutory safety valve: the regulatory 50% cap. Tax deducted through PAYE in any pay period cannot exceed half your gross pay for that period. If the calculation demands more, payroll deducts exactly 50% and HMRC collects the balance later. Our calculator applies the cap and tells you when it bites.
When you’ll see K codes
- Company benefits (car, fuel, medical insurance) worth more than your personal allowance.
- You owe tax from a previous year and HMRC is collecting it through your code.
- Your state pension — paid gross — exceeds your personal allowance.
- Several smaller adjustments that together wipe out the allowance and go beyond it.
K codes vs other common codes
| Code | Personal allowance | How income is taxed |
|---|---|---|
| 1257L | £12,570 | Standard bands after the allowance |
| BR | £0 | Flat 20% on everything |
| 0T | £0 | Normal bands from the first pound |
| D0 | £0 | Flat 40% on everything |
K codes questions, answered
Related tax codes
1257L
The standard code for 2025/26 — a £12,570 tax-free personal allowance, applied evenly across the year.
Decode itEmergency tax (W1/M1/X)
Usually a 1257L code with a W1, M1 or X suffix — each payday taxed in isolation until HMRC confirms your details.
Decode itBR
Basic Rate on everything: 20% from the first pound, no personal allowance — normal for second jobs and pensions.
Decode it0T
Zero allowance, but normal bands: 20%, then 40%, then 45% — from the very first pound you earn.
Decode itScottish tax codes (S)
An S at the front of your code means Scottish rates: six bands from 19% to 48% in 2025/26.
Decode itW1 / M1 / X
Suffixes, not codes: W1 (weekly), M1 (monthly) and X switch off the year-to-date calculation.
Decode itNot sure this is the right code for you?
Don’t take our word for it — HMRC holds the code they’ve actually issued for each of your jobs, and you can check it in two minutes.
Sources: tax codes — gov.uk · income tax rates · Scottish income tax