Short answer: £12,570. That's your Personal Allowance for 2026/27, and it's the amount you can earn from a job or self-employment before you owe any income tax at all.
But tax isn't the only thing taken from your pay, and there are a few extras that can stretch your tax-free amount further. Here's the full picture.
The standard Personal Allowance is £12,570 for the 2026/27 tax year (6 April 2026 to 5 April 2027). Employment and self-employment income use the same standard allowance, but eligibility and personal circumstances matter. It reduces above £100,000 adjusted net income; additional allowances or non-resident rules can also change the amount. See HMRC allowances.
This figure has been frozen at £12,570 since 2021 and isn't going up until at least April 2028. With wages and prices rising, more people are getting pulled into tax each year. Lovely stuff.
Here's the thing most people forget: income tax isn't your only deduction. You also pay National Insurance contributions (NI), and the threshold for that is also £12,570 per year (£242 per week) for employees.
So in practice, you start losing money from your pay at the £12,570 mark from both income tax and NI at the same time. Above that, you'll pay 20% income tax plus 8% NI — that's 28p in every pound between £12,570 and £50,270.
If you earn less than £12,570 (so you're not using your full Personal Allowance), you can transfer £1,260 of it to your husband, wife or civil partner — as long as they're a basic rate taxpayer. That saves them up to £252 a year in tax.
It's free to apply and you can backdate it up to four years. Plenty of couples miss this one, so it's worth checking if you qualify.
If you're registered as blind or severely sight impaired, you get an extra £3,250 on top of your Personal Allowance. That means you can earn up to £15,820 before paying any income tax. You can also transfer any unused portion to your spouse or civil partner.
Got a little side income — selling on eBay, doing odd freelance jobs, that sort of thing? You get a £1,000 trading allowance each year. That's £1,000 of self-employment income completely tax-free, on top of your Personal Allowance. You don't even need to tell HMRC about it if you stay under that limit.
Interest from savings accounts has its own tax-free allowance, called the Personal Savings Allowance:
If your other taxable income, excluding savings interest and dividends, is below £17,570, you may qualify for up to £5,000 of starting-rate savings interest at 0%. Every £1 of other income above your Personal Allowance reduces that starting-rate band by £1. See HMRC savings-interest guidance.
If you receive dividends (from shares or a limited company), you get a £500 tax-free dividend allowance. This was £2,000 until April 2023, £1,000 for 2023/24, and £500 from April 2024 onwards. Anything above that gets taxed at 10.75% (basic rate), 35.75% (higher rate) or 39.35% (additional rate) for 2026/27.
Yes, you get the full £12,570 Personal Allowance even if you're a student, work part-time, or only work during the summer. There's no age limit and no minimum hours requirement. If you earn under £12,570 in the tax year, you pay no income tax — simple as that.
One thing to watch: if you start a new job and don't have a P45 from a previous employer, you might get put on an emergency tax code and pay too much tax upfront. You'll get it back, but it can be annoying. Check your tax code on your payslip or use our take-home pay calculator to see what you should be paying.
Retired? Your Personal Allowance is exactly the same: £12,570. There used to be a higher allowance for people over 65, but that was scrapped years ago. The State Pension counts as taxable income (though it's paid without tax deducted), so if your State Pension plus any private pension income goes above £12,570, you'll owe tax on the excess.
If you earn over £100,000, things get messy. HMRC takes away £1 of your Personal Allowance for every £2 you earn above £100k. By the time you reach £125,140, your allowance is completely gone and you're paying tax from the very first pound.
The effective marginal tax rate in that £100,000 to £125,140 range is 60%. That's not a typo. We've written a full guide to the £100k tax trap with strategies to avoid it.
Enter your salary and get a full breakdown of income tax, NI, pension and student loan deductions.
| Allowance | Tax-Free Amount |
|---|---|
| Personal Allowance | £12,570 |
| Marriage Allowance (transfer) | £1,260 |
| Blind Person's Allowance | £3,250 |
| Trading Allowance | £1,000 |
| Savings Allowance (basic rate) | £1,000 |
| Dividend Allowance | £500 |