Written and reviewed by James Whitfield · Updated for 2026/27 · Editorial standards · Methodology
The UK personal allowance for 2026/27 is £12,570. It is tax-free for most employees but tapers away above £100,000, creating a 60% effective marginal rate. Full explanation with worked examples.
The personal allowance for 2026/27 is £12,570, unchanged since 2021/22 due to the freeze. It tapers away above £100,000, creating a 60% effective marginal rate between £100k and £125,140.
The personal allowance is the amount of income you can earn each tax year before paying income tax. For 2026/27, the personal allowance is £12,570, unchanged since 2021/22 as it has been frozen as part of government fiscal policy. Every UK taxpayer with a standard 1257L tax code has this allowance applied automatically through PAYE.
The allowance means the first £12,570 of your annual gross earnings is completely free of income tax. You still pay National Insurance on earnings above £12,570 (the primary threshold, which matches the personal allowance in 2026/27), but no income tax is charged on that lower slice. For a salary of £25,000, the taxable income subject to income tax is £12,430 (£25,000 minus £12,570).
Not everyone receives the full personal allowance. High earners see it withdrawn above £100,000. Non-UK residents may have a restricted allowance. Blind Person's Allowance (£3,070 additional in 2026/27) is available for qualifying individuals. Marriage Allowance allows one partner to transfer 10% of their personal allowance to the other where the recipient is a basic-rate taxpayer.
Your personal allowance is reflected in your tax code, which your employer uses to calculate PAYE each pay period. The standard code 1257L means £12,570 allowance. HMRC calculates PAYE on a cumulative basis, if you start a job midway through the tax year, the allowance is applied pro-rata for the portion of the year remaining, and you may receive additional tax relief through reduced PAYE in subsequent months.
If your tax code is lower than 1257L, for example, 600L, your employer treats only £6,000 as tax-free. This happens when HMRC has offsetting income (taxable benefits, second income) that reduces the available personal allowance. The result is higher monthly income tax deductions. If your code is higher than 1257L, for example, 1500L, you have additional allowances such as work-related expense claims.
Checking your tax code against HMRC's Personal Tax Account is the quickest way to verify you are receiving the correct personal allowance. An incorrect code can result in underpaying or overpaying by hundreds of pounds per year. HMRC issues P800 reconciliation notices after the year-end to correct any overpayment.
For every £2 of income above £100,000, £1 of personal allowance is withdrawn. This continues until the allowance reaches zero at £125,140. The effect is that earners in this band face a 60% effective marginal income tax rate: 40% higher rate on the additional income, plus 40% on the slice of previously tax-free income that is now taxed as the allowance shrinks.
Add 2% employee NI (which applies to all earnings above £50,270) and the combined effective marginal rate in the taper zone is 62%. This means a pay rise from £100,000 to £110,000 yields only approximately £3,800 in additional net take-home, compared with approximately £5,800 for the same pay rise at £60,000.
The clearest way to understand this: between £100,000 and £125,140, you pay income tax on £2.50 of income for every £2 you actually earn above £100,000. The standard calculation for the effective rate is 40% on the new income plus 40% on the additionally-exposed personal allowance, divided by the gross increase. Pension salary sacrifice is the primary legitimate planning tool for reducing exposure in this band, each £2 of salary sacrifice directly restores £1 of personal allowance.
The Marriage Allowance allows one spouse or civil partner to transfer 10% of their personal allowance (£1,260 in 2026/27) to the other, where the transferring partner earns below the personal allowance and the recipient is a basic-rate taxpayer. The recipient's tax bill reduces by up to £252 per year (20% of £1,260).
This is worth claiming if one partner is not using their full personal allowance, for example, a part-time earner or someone on a break from employment. Claims can be backdated for up to four years, meaning eligible couples can claim up to approximately £1,008 in backdated tax relief. Claims are made through HMRC's online service.
Marriage Allowance is separate from the Married Couple's Allowance, which applies only in specific circumstances (typically older taxpayers). For most working-age couples, Marriage Allowance is the relevant option, and it is frequently unclaimed.
Current tax-year thresholds used across this guide and calculator.
£12,570. This is the amount of income you can earn each tax year before paying income tax. It has been frozen at this level since 2021/22 as part of government fiscal policy. The standard tax code reflecting this is 1257L.
The taper begins at £100,000 adjusted net income. For every £2 earned above £100,000, £1 of personal allowance is withdrawn. The allowance reaches zero at £125,140. In the taper zone, the effective marginal income tax rate is 60%, making pension salary sacrifice exceptionally valuable for earners in this range.
Not directly, the standard £12,570 is set by HMRC. However, you can receive an enhanced effective allowance through Marriage Allowance (if your partner transfers 10% of theirs to you) or through work expense claims which adjust your tax code upward. Pension salary sacrifice reduces adjusted net income, which preserves the allowance for those in the taper zone.
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