Personal Allowance: £12,570 — no tax on income up to this amount (tapers above £100,000)
Basic Rate: 20% on taxable income between £12,571 and £50,270
Higher Rate: 40% on taxable income between £50,271 and £125,140
Additional Rate: 45% on taxable income above £125,140
8% on earnings between £12,570 and £50,270
2% on earnings above £50,270
No NI on earnings below the Primary Threshold (£12,570/year).
What does 1257L mean?
Tax code 1257L is the standard code for most UK employees. The number (1257) × 10 = £12,570 — your personal allowance. The L means you are entitled to the standard personal allowance.
Why does take-home drop sharply at £100,000?
Above £100,000 the personal allowance reduces by £1 for every £2 of income, creating an effective 60% marginal rate between £100,000 and £125,140.
Are these figures accurate?
This uses 2024/25 England, Wales and Northern Ireland rates. Scottish rates differ. This is for guidance only — always check with HMRC or an accountant for your specific situation.