What Is the Personal Allowance and How Does It Affect UK Income Tax?

For the 2026–27 UK tax year, the standard Personal Allowance is £12,570. This is the amount of income most people can receive before paying UK Income Tax. The tax year runs from April 6, 2026, to April 5, 2027. Your actual Income Tax bill also depends on how much taxable income you have, the rates that apply where you live, and whether your allowance has been reduced or adjusted. These figures were checked against HM Revenue & Customs (HMRC) guidance on November 3, 2026.

What is the Personal Allowance?

The Personal Allowance is an annual tax-free amount for an individual, not a payment or refund from the government. It usually offsets the first £12,570 of your taxable income. It is not a separate allowance for every job, bank account, or pension. A person with two jobs does not automatically receive £12,570 tax-free from each employer.

Income Tax can apply to employment earnings, self-employment profits, pensions (including the State Pension), rental profits, certain benefits, savings interest, and dividends. Some forms of income are exempt or have different allowances, so do not simply add every payment entering your bank account. Start with HMRC's overview of taxable and tax-free income.

How does the Personal Allowance affect Income Tax?

For a straightforward calculation, subtract your available Personal Allowance from income subject to ordinary Income Tax rates. Then apply the relevant rates in slices, called tax bands. A higher tax rate applies only to the portion within that higher band, not automatically to your entire salary.

1. Identify the tax year. Use the correct April 6–April 5 period; income tax thresholds can change between years.
2. Work out the taxable income. Gather employment income, taxable pensions, self-employment profits, and other taxable amounts, allowing for applicable deductions or reliefs.
3. Check your allowance. The usual starting amount is £12,570, but your circumstances may change it.
4. Apply the appropriate rates. Scotland has different bands for employment, pensions, and most non-savings income. Savings and dividends have separate rules across the UK.

2026–27 rates in England, Wales, and Northern Ireland

The following simple bands apply to ordinary income when you receive the full standard Personal Allowance. The income ranges below are expressed as total annual income for this example, not as the size of each taxable slice.

For example, if your only taxable income is a £32,570 salary and you have the full allowance, £12,570 is tax-free and £20,000 is taxed at 20%. Your estimated annual Income Tax is £4,000, before considering any other adjustments. That is not your total payroll deduction: National Insurance and other deductions are separate.

What changes if you live in Scotland?

Scottish taxpayers generally receive the same UK Personal Allowance, but Scottish Income Tax rates and bands apply to wages, pensions, and most other non-savings income. For 2026–27 the Scottish rates are 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced, and 48% top. Their thresholds differ from those in the table above. Dividends and savings interest use UK-wide rules. Review HMRC's Scottish Income Tax bands rather than applying England's calculation to a Scottish payslip. Wales currently uses the rates shown in the table above.

What happens when income exceeds £100,000?

Your standard Personal Allowance is reduced by £1 for every £2 of adjusted net income above £100,000. Adjusted net income is a defined HMRC figure based on taxable income after certain reliefs, including some pension contributions and qualifying Gift Aid donations. It may not equal the salary printed on your employment contract.

At £110,000 of adjusted net income, the amount over £100,000 is £10,000. Half of that, £5,000, is deducted from £12,570, leaving £7,570. This withdrawal creates a particularly steep effective Income Tax rate for some people in the £100,000–£125,140 range. Pension payments or charitable donations can sometimes affect adjusted net income, but the exact tax outcome depends on how the payments are made and the person's wider circumstances. Use HMRC's adjusted net income guidance before making decisions based on this threshold.

What information do you need to check your allowance?

For an accurate first check, collect your latest payslip and tax code, plus income estimates for the entire tax year. If relevant, include other employment, taxable benefits, self-employment profits, pensions, rental income, taxable savings interest, and dividend income. Keep records of pension contributions, Gift Aid donations, and any HMRC correspondence. A P60 from an employer or pension provider can help when reviewing a completed tax year.

Then use HMRC's Check your Income Tax service to compare your reported jobs, pensions, expected income, tax code, and Personal Allowance. The service is intended for people whose tax is handled through employment or pensions; if Self Assessment is the only way you pay Income Tax, you cannot use it to check your current-year tax. Use your tax return records instead.

How do you find the allowance on a payslip?

Employers and pension providers generally use PAYE (Pay As You Earn) to deduct Income Tax before paying you. HMRC supplies a tax code that tells payroll how to handle the tax-free amount and rates. The common 1257L code broadly reflects a £12,570 allowance for someone with one job or pension and no adjustments. S1257L signals Scottish rates and C1257L signals Welsh rates.

Your code can be different because of another job, an untaxed pension, a company benefit, an earlier tax adjustment, or other circumstances. Codes ending in W1, M1, X, or displayed as NONCUM are emergency codes that generally calculate tax using the current pay period rather than a cumulative annual position. They may lead to temporary overpayment or underpayment. Check the code against the official HMRC tax code tool, and update inaccurate details with HMRC instead of assuming your employer can choose a new code.

Are there other allowances worth checking?

• Marriage Allowance: Eligible married couples and civil partners can transfer £1,260 of the lower earner's Personal Allowance, potentially reducing the recipient's annual tax by up to £252. Eligibility depends on the couple's incomes and tax bands; the transfer is not necessarily beneficial in every case. See HMRC Marriage Allowance rules.
• Blind Person's Allowance: Eligible taxpayers can claim an additional £3,250 for 2026–27. This is separate from the standard Personal Allowance. See official allowance amounts.
• Savings and dividends: These have their own rules and allowances. For example, the Personal Savings Allowance can be up to £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers, and zero for additional-rate taxpayers. Confirm how your combined income affects your band using HMRC savings guidance.

The Personal Allowance is also not the same as National Insurance. National Insurance has its own thresholds and eligibility rules, even when a threshold happens to have the same annual figure. Likewise, the State Pension is generally taxable income even though tax is not deducted from State Pension payments themselves. HMRC may collect the tax through another pension or employment code, or issue a tax calculation.

Common mistakes and when to seek a more detailed calculation

• Using monthly pay as if it were annual income: Annualize carefully and account for irregular bonuses or changes in earnings.
• Giving each job a full allowance: Your combined tax position matters, even if payroll codes differ between employers.
• Applying one tax rate to the entire salary: Ordinary Income Tax is progressive and charged in bands.
• Ignoring the £100,000 taper: Above this adjusted net income level, a simple £12,570 deduction can understate tax.
• Confusing gross salary with adjusted net income: The distinction matters when pension relief, Gift Aid, and multiple income sources are involved.
• Assuming a lower-than-expected paycheck proves the allowance is wrong: First separate Income Tax from National Insurance, pension deductions, student loan repayments, and other payslip items.

A straightforward salary and standard tax code may be easy to estimate using HMRC's online services. Seek a more detailed calculation if you have several income sources, significant savings or dividends, complex pension contributions, high adjusted net income, Scottish residence changes, or international tax circumstances. For non-UK residents, entitlement to a UK Personal Allowance is not automatic; different eligibility rules can apply.

Bottom line: Start with the £12,570 standard allowance for 2026–27, verify your total taxable income and location-specific rates, and check whether your allowance has been adjusted. The best confirmation is that your HMRC income estimate, tax code, and payroll deductions all reflect the same up-to-date facts. Rates and rules can change in later tax years, so recheck the official current-year rates and allowances when you review a different year.