How are Codes calculated?

Your tax code is made up of your personal allowances and any deductions that you have claimed, such as relief for mortgage interest paid. Your code may also take account of small amounts of other income, such as interest from savings accounts. When all your personal circumstances are taken into account, the amount of income that you can earn from your employment per year before you pay any tax, is known. This is then converted into a code which will be issued both to you and your employer.

Your employer is only told the final code value and not how the code is made up.

Your coding notice shows full calculations and there are some guidance notes on the reverse.