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BR tax code: what it means and what it costs you

BR stands for basic rate. It means your employer takes 20% of every pound from that job, with no tax-free Personal Allowance. That is normally correct for a second job, and costly when it is on your only job.

Updated . Facts checked against GOV.UK on .

What BR means

Your tax code tells your employer how much Income Tax to take from each payment. HMRC sets the code, and each job or pension gets its own. GOV.UK says BR means all the income from that job or pension is taxed at the basic rate of 20%.

The important part is what BR leaves out. It has no Personal Allowance in it, so the first pound you earn from that job is taxed. On a standard 1257L code, the first £12,570 you earn from that job in the tax year is tax-free.

Why you get a BR code

You usually see BR on a second job or pension. GOV.UK explains that each job has its own code, and that your Personal Allowance is usually given to the job that pays you most. That job carries 1257L, and the others get BR, D0 or D1.

BR can also be set when you start a job. On the online starter checklist (or the PDF), statement C reads “I have another job and/or I am in receipt of a State, workplace or private pension”. Ticking it tells your employer to use tax code BR.

When BR is right

BR is normally correct when all of these are true:

  • Another job or pension already uses your Personal Allowance.
  • You ticked statement C on the starter checklist, or HMRC has told your employer to use BR.
  • Your total income for the year stays within the basic rate, so none of it should be taxed at 40%.

When BR is wrong

BR is usually wrong in these situations.

You can check which situation applies by looking at your payslip. The code is printed there, and it is also shown in the HMRC app and your personal tax account. GOV.UK lists those places as ways to find your code.

  • It is on your only job. With no allowance, you pay 20% on pay you could otherwise have kept tax-free. At the basic rate, the allowance is worth 20% of £12,570 a year in tax.
  • Your total income moves into the higher rate. BR still charges 20% on everything from that job, so the extra income is not taxed at 40% through this code. HMRC can collect a shortfall later by adjusting your tax code.
  • Neither of your jobs has 1257L, so your Personal Allowance is not being used at all, and HMRC has not split it.

A worked comparison

Take one job paying £30,000 a year, with no other pay, in England, Wales and Northern Ireland.

On BR, the employer takes 20% of the whole £30,000, which is £6,000 of Income Tax for the year. On 1257L, the first £12,570 is tax-free, so tax is only charged on the £17,430 above it. That comes to £3,486 (20% of £17,430, i.e. £30,000 − £12,570).

The difference between the two is the Personal Allowance. It is worth £2,514 a year to a basic-rate taxpayer (20% of £12,570). Scotland has its own rates and bands, so these figures do not apply there.

What to do if the code looks wrong

Work through these steps in order. Most problems come from a starter checklist that did not match your situation, or from job details that HMRC holds incorrectly.

  • Check the code in the HMRC app or your personal tax account. Both also show codes for previous tax years.
  • If you ticked statement C but have no other job or pension, tell your employer and check your details in the HMRC app or your personal tax account so HMRC can correct your code.
  • Check your details in your personal tax account or the HMRC app. GOV.UK says wrong or missing employer records can make your code wrong, and that you should update them there.
  • If the code is still wrong, contact HMRC. Ask whether your Personal Allowance can be split between your jobs. GOV.UK says a split can reduce the tax taken from your other job, but if your income varies, you might not pay the right amount of tax.

If BR has taken too much tax

Once HMRC has the right code, any overpayment is put right through your pay. If the problem only shows at the end of the tax year, HMRC sends a P800 tax calculation letter. The letter explains how to claim a refund or pay any tax you owe.

The preset in the calculator below is a second job at £12.71 an hour for 12 hours a week, on BR. £12.71 is the National Living Wage for workers aged 21 and over from 1 April 2026. Try changing the tax code in the calculator to see how much of the estimate depends on it.

Why it matters at the end of the year

BR can look right on one payslip and still be wrong for the year as a whole. After the tax year ends on 5 April, HMRC checks the tax you paid against the tax you should have paid. If your total income does not fit the code, a P800 letter may follow, showing either a refund or a bill.

Keep your payslips for the whole year. They are the simplest evidence if you need to question a P800 later.

Related guides

Sources

This is an estimate, not financial or tax advice. Your payslip is the final figure.