A tax code or PAYE code is broadly used to determine how much tax you should pay on your earnings. As a general rule most students will be entitled to a basic personal allowance which is donated by a number followed by the letter “L” in their tax code. This means you are entitled to a basic tax free personal allowance and then your pay will be taxed in bandings of 10% (the starting rate), 20% (the basic rate) and lastly 40% (the higher rate).
However, the code will change depending on your particular circumstances and may change by reference to age, dependants etc.
For further details the Inland Revenue have issued a good booklet P3. Check the link on our resources page» to download the booklet.