What is the meaning of a tax code on a payslip from the UK?

On a payslip, the UK tax code states the amount of money you are allowed to earn without being taxed. As an example, the code 1257L is used to tell you that up to £12,570 of your earnings is not subject to tax every year. The code letter you get identifies your tax situation such as “L” for the regular tax deduction or “M” if you shared some of your allowance with your spouse. HMRC gives employers these codes to assist in the correct calculation of taxes that must be deducted. A change in your tax code may happen if you get a new job, your benefits change or your income rises.