The Personal Allowance is the most important number in UK income tax. It is the tax-free slice of your annual income before Income Tax starts. The headline number has been frozen since 2021/22, but the bands above have changed — so the same £12,570 covers progressively less in real terms each year.
The Personal Allowance is the amount of UK income you can earn each year before paying Income Tax. In 2026/27 it is £12,570, the same as every year since 2021/22 (the "freeze"). It tapers at £1 lost for every £2 of income above £100,000 and is fully gone by £125,140. Most adults get the full £12,570; the only routine adjustments are Marriage Allowance and the over-100k taper.
Your annual income tax is calculated by removing the Personal Allowance from your gross income, then applying the bands:
The Personal Allowance applies to most types of UK income — salary, pension, savings interest, dividends — but it is consumed in priority order: first against non-savings income (salary/pension), then savings interest, then dividends.
For every £2 of income above £100,000, you lose £1 of your Personal Allowance — down to zero at £125,140.
Mechanically this means each £1 above £100,000 is taxed:
This 62% band is the famous 60% trap — the highest standard marginal rate in the UK system. Most affected high earners use pension salary sacrifice to push adjusted net income below £100,000.
If one of you earns under £12,570 and the other earns under £50,270, the lower earner can transfer £1,260 of their unused Personal Allowance to the higher earner. The higher earner saves 20% × £1,260 = £252 a year in income tax.
Both spouses (or civil partners) must apply jointly via the lower earner. It can be backdated 4 tax years. Once claimed, it auto-renews each year until you cancel — important if circumstances change.
Marriage Allowance becomes unavailable once the higher earner crosses into higher rate at £50,270. Above that, no transfer. The Marriage Allowance checker works out whether you're eligible.
The UK tax calculator shows the exact breakdown of PA, basic rate, higher rate and NI for any income.
Open the tax calculator →Personal Allowance rates, freeze policy and taper rules from gov.uk/income-tax-rates. Marriage Allowance rules from gov.uk/marriage-allowance.
UK Tax Drag is not authorised by the Financial Conduct Authority and does not provide regulated financial advice — see the content disclaimer for the full position. The methodology page documents how every calculator is built and reviewed.
Four scenarios showing how the Personal Allowance behaves across income levels and life stages.
Situation: Working 16 hours/week at £12.50/hour during term, earns ~£10,400/year.
Question: Does Alex pay any tax?
What to do: No income tax — below the £12,570 Personal Allowance. Some NI applies above £12,570 primary threshold. Tax code 1257L applied automatically. If Alex were a non-resident student visiting from abroad, the PA still applies for UK earnings under most double-taxation treaties.
Situation: Salary £14,000, husband Jay earns £35,000. They claimed Marriage Allowance.
Question: How does the £1,260 transfer work?
What to do: Priya gives up £1,260 of her £12,570 PA — leaving £11,310. Her taxable income is £14,000 - £11,310 = £2,690 × 20% = £538 tax (vs £286 without MA). Jay gains £1,260 of allowance, saving £1,260 × 20% = £252. Net household saving: £252 - £252 of Priya's extra tax = £0 in simple math. Why claim? Most cases the lower earner is BELOW PA so they don't pay extra tax — the saving is full £252/year.
Situation: Salary £105,000, no salary sacrifice yet.
Question: What's left of his Personal Allowance?
What to do: PA tapers £1 per £2 over £100k. At £105,000: lost £2,500 of PA. Remaining PA = £12,570 - £2,500 = £10,070. Effective marginal rate in this band = 60% (40% IT + lost 40% on retained allowance). Solution: sacrifice £5,000 into pension to drop ANI to £100k, fully restore PA. Net cost of pension contribution: £2,000 (60% effective relief).
Situation: New State Pension £12,547.60/year + £8,000 BTL net rental income.
Question: How does PA apply to her £19,973 total?
What to do: Personal Allowance £12,570 fully available. State Pension is tax-free up to PA (£12,547.60 ≤ £12,570). Rental income £8,000 taxable: first £597 still in unused PA, remaining £7,403 at 20% basic = £1,481 tax. Total tax owed: £1,481. Filed through Self Assessment because rental income > £2,500.
Scenarios use 2026/27 UK tax-year rates. Personas are illustrative — verify your own situation against current HMRC guidance.
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