The personal allowance is the amount of income you can earn in a tax year before you start paying Income Tax, and for most people in the United Kingdom it is the single most important number in their tax calculation. If your income stays within it, you owe no Income Tax at all. If your income goes above it, only the slice above it is taxed, at the rates that apply to each band. That simple idea hides a few traps, though, especially for anyone earning above £100,000, where the personal allowance starts to shrink, and for anyone whose tax code does not reflect their real position.
This article explains the personal allowance on its own terms: what it is, how much it is for the 2026/27 tax year, how it works through your payslip, how the taper above £100,000 works, and the mistakes people most often make. It is general information only, not regulated financial advice, and every figure here is for the 2026/27 tax year as published by GOV.UK. It is not a general Budget recap and it is not a guide to the whole tax system; the focus is strictly on this one allowance.
In short, the standard personal allowance for 2026/27 is £12,570. That is the amount of income you do not have to pay tax on. It falls by £1 for every £2 of adjusted net income above £100,000, and it reaches zero once adjusted net income hits £125,140.
What the personal allowance actually is
Think of the personal allowance as a zero-rate slice at the bottom of your income. Income up to £12,570 is taxed at 0%. Income above that is taxed in slices, with each slice charged at the rate for its band. You never pay tax on the same pound twice, and you never lose the whole personal allowance just because you cross into a higher band. Crossing a threshold only changes the rate on the income above it.
That slice applies to your total income for the tax year, not to each job separately. The tax year runs from 6 April 2026 to 5 April 2027, and the personal allowance is worked out across the whole year. A bonus, a second income, rental profit or a taxable benefit can therefore change your position even if your salary alone looks straightforward, because it is total income that counts, not one payslip in isolation.
It is also worth being clear about what the personal allowance is not. It is not a payment, a refund or a sum HMRC hands you. It is simply income that is not taxed. Nor is it the same thing as the tax-free allowances for savings interest or dividends, which sit separately. Those other allowances exist alongside it, but they do not change the size of the personal allowance itself.
One common misunderstanding is that earning more can leave you worse off overall. In the ordinary band structure it cannot: only the income inside each band is taxed at that band’s rate. The exception people worry about is the taper zone above £100,000, where the effective rate on extra income is unusually high. Even there, earning more still leaves you with more after tax; it is the rate on the extra slice that stings, not the total. That distinction matters, and it is covered in detail below.
The 2026/27 figures, as published by GOV.UK
For the 2026/27 tax year, the standard personal allowance is £12,570. GOV.UK (https://www.gov.uk/income-tax-rates/print) states it plainly: it is the amount of income you do not have to pay tax on. The same figure applied in 2025/26, and GOV.UK’s published rates table also lists £12,570 for 2027/28. In other words, this is a frozen threshold, not one that rises with pay or prices, which is why it keeps appearing in the news: as wages rise, more income drifts above a line that has not moved.
The income tax bands that sit above the personal allowance, for England, Wales and Northern Ireland, are as follows. Income up to £12,570 is taxed at 0%. Income from £12,571 to £50,270 is taxed at the basic rate of 20%. Income from £50,271 to £125,140 is taxed at the higher rate of 40%. Income over £125,140 is taxed at the additional rate of 45%. Scotland sets its own income tax rates and bands, so Scottish taxpayers should check the Scottish bands, but the personal allowance itself and its taper work the same way across the UK.
Two thresholds do most of the work in this article, so it is worth fixing them in mind. The first is £100,000, the point where the personal allowance begins to taper. The second is £125,140, the point where it disappears entirely. The gap between them is £25,140, and that number is no coincidence: it is exactly twice the £12,570 allowance, because the taper removes £1 of allowance for every £2 above £100,000.
How it reaches your payslip: the 1257L tax code
Most employees never see the personal allowance as a separate line. They see it through their tax code. The standard code for 2026/27 is 1257L, and it encodes the personal allowance directly: multiply the number by ten and you get £12,570, while the letter L means you are entitled to the standard allowance with no special adjustment. If your payslip shows 1257L, your employer is spreading that £12,570 of tax-free pay across the year, so roughly £1,047.50 of each month’s pay is tax-free before the 20% rate starts to bite.
Your code changes when your circumstances change. If you have taxable benefits, untaxed income, or tax owed from an earlier year, HMRC adjusts the code so the right amount is collected through the year. If your income is expected to pass £100,000, HMRC may reduce the code to collect the extra tax through PAYE rather than leaving a large bill at the end of the year. Scottish taxpayers see the same digits with an S prefix, as in S1257L, because Scottish rates apply, and Welsh taxpayers see a C prefix.
The full personal allowance normally sits with one job or pension, your main one. That is why a second job often carries a different code that taxes all of its pay at the basic rate: the personal allowance has already been used up elsewhere, and giving it twice would underpay tax. If two employers both use 1257L for you, that is a warning sign worth checking, not a windfall.
An emergency code can also appear when HMRC does not yet have full information, for example when you start a new job without a P45. The code 1257L operated on a week-one or month-one basis means tax is worked out on each pay period alone rather than cumulatively across the year, which can over- or under-collect tax until HMRC issues a corrected code. The fix is to check the code, not to ignore it.
The taper: what happens above £100,000
This is the part of the personal allowance that catches people out, because it is a slope, not a cliff, and it is easy to miss until a tax code changes or a bill arrives. Once your adjusted net income goes above £100,000, your personal allowance goes down by £1 for every £2 above that line. Adjusted net income is your total income less certain deductions such as gross pension contributions and Gift Aid donations, so it is not quite the same number as your salary, but for many employees the two are close.
Work through the arithmetic and the shape becomes clear. At exactly £100,000, you still have the full £12,570. At £110,000, you are £10,000 above the line, so you lose £5,000 of personal allowance and keep £7,570. At £120,000, you are £20,000 above the line, so you lose £10,000 and keep £2,570. At £125,140, you are £25,140 above the line, so you lose the whole £12,570 and keep nothing. Every pound above £125,140 is then taxable from the first pound, because there is no tax-free slice left.
That taper is also why the £100,000 to £125,140 stretch is often called the 60% trap. There is no official 60% tax band, and GOV.UK’s rate table lists nothing of the kind. The figure comes from combining two published rules: each extra £1 in that stretch is itself taxed at the 40% higher rate, and it also drags 50p of previously tax-free allowance into tax at 40%, adding another 20p. Together that is 60p of Income Tax on each extra £1, before National Insurance. It is an effective marginal rate, not a band, but it is real money, and it is the reason a pay rise in this zone can feel surprisingly small in take-home pay.
A second sting in the same income zone is timing. The taper is worked out on the tax year as a whole, not month by month. A salary below £100,000 can cross the line because of a one-off bonus, a taxable benefit or rental profit, and if the tax code still carries the full allowance, payroll will keep deducting as though nothing changed. The difference then surfaces later, when HMRC reconciles the year. That is why people in this zone often first hear about the taper from a coding notice or a Self Assessment calculation, not from their payslip.
Worked examples using the 2026/27 figures
Examples make the personal allowance concrete, so here are three, all using the published 2026/27 figures for England, Wales and Northern Ireland and all worked from the allowance outward.
First, someone with total income of £35,000. The first £12,570 is tax-free. The remaining £22,430 falls inside the basic-rate band and is taxed at 20%, giving Income Tax of £4,486. GOV.UK itself uses this £35,000 illustration, and the arithmetic follows directly from its bands.
Second, someone with total income of £60,000. The first £12,570 is tax-free. The next £37,700, taking income up to £50,270, is taxed at 20%, which is £7,540. The remaining £9,730, taking income up to £60,000, is taxed at 40%, which is £3,892. Total Income Tax is £11,432. Notice how the personal allowance shelters the first slice in both examples, and how only the income inside each band pays that band’s rate.
Third, someone with adjusted net income of £110,000. The taper has removed £5,000 of personal allowance, leaving £7,570 tax-free. Income above that is taxed at 20% up to £50,270 and at 40% above it, and because the allowance is smaller, more income is exposed to tax than it would be for someone on the same pay with the full allowance. At £125,140, by contrast, there is no tax-free slice at all, and every pound is taxed, with the additional rate of 45% applying above that line.
These are simplified illustrations of Income Tax only. National Insurance, student loan repayments, pension contributions and Scottish rates are all outside this article’s scope, and they will change any individual’s final take-home figure. The point of the examples is the shape of the allowance, not a personal calculation.
Who gets it, and when it varies
The standard allowance applies regardless of date of birth: GOV.UK’s published table (https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances) states that the reduction above £100,000 applies irrespective of date of birth, and there is no longer a separate higher allowance for older taxpayers. Age alone does not change the £12,570 figure. What changes it is income, and the two recognised additions.
The first addition is Blind Person’s Allowance. If you claim it, the extra tax-free amount is added to your allowance, so you can earn more before you start paying Income Tax. The second is Marriage Allowance, which GOV.UK describes as available where your income is less than the standard allowance and you are married or in a civil partnership: the lower earner can transfer part of their allowance to their partner, reducing the partner’s tax. The exact transfer amount is not stated in this article because it was not verified from GOV.UK in this session, and readers should check the current GOV.UK Marriage Allowance page before relying on a figure.
If your income is over £125,140, GOV.UK is blunt: you do not get an allowance on taxable income over that line. That is the hard end of the taper, and it applies whether the income comes from salary, self-employment, pensions, rent or a combination. Equally, if your total income is below £12,570, you owe no Income Tax, although National Insurance and other deductions may still apply, and that is a separate question from the allowance itself.
Residence and domicile nuances can affect how the allowance applies in cross-border cases, but those rules turn on individual circumstances and were not verified from GOV.UK in this session, so they are deliberately left out here. Anyone with non-UK income, a non-UK residence position or a complex domicile history should check their position directly rather than assuming the standard treatment in this article applies unchanged.
Common mistakes to avoid
The first mistake is assuming the allowance is per job. It is per person, per tax year, and spreading it across two employers is one of the fastest ways to end the year owing tax. If you have two jobs or a job and a pension, check that the full allowance is only being used once.
The second mistake is forgetting the taper. People on a salary just under £100,000 often assume the allowance is safe, then a bonus or a taxable benefit pushes adjusted net income over the line. The taper starts with the first pound above £100,000, so even a small excess trims the allowance, and the effect grows with every extra pound up to £125,140.
The third mistake is reading a tax code as permanent. Codes change when HMRC learns something new: a benefit, an underpayment, a second income, or income passing £100,000. A code that was right in April can be wrong by October, and the longer a wrong code runs, the larger the correction. Checking a code after any change of job, benefit or income is a small habit that prevents a large bill.
The fourth mistake is confusing the allowance with the bands. Losing the allowance does not mean all your income is suddenly taxed at 45%, and entering the higher-rate band does not mean all your income is taxed at 40%. Only the slice inside each band pays that band’s rate, and only the allowance itself is tapered. Keeping those two ideas separate makes the whole system much easier to follow.
The fifth mistake is treating the frozen £12,570 as a reason to ignore it. Because the figure has not moved while pay has risen, more people drift into tax, and more people drift into the taper zone, without any change in the rules. The allowance matters more, not less, precisely because it is frozen: every pound of pay rise above it is taxed, and every pound above £100,000 erodes it as well.
How to check your own position
The quickest check is your payslip, which shows your tax code. If it reads 1257L and you have one main job, no taxable benefits and income below £100,000, it is usually the right code. If anything in that sentence is untrue, the code may need a second look. HMRC’s Check your Income Tax service shows your allowance and tax code, how much tax you have paid so far in the year, and how much you are likely to pay for the rest of it, and it is the same information your employer is working from.
If you believe your code is wrong, the route is HMRC, not your employer alone: your employer can only apply the code HMRC issues. Tell HMRC about the change in circumstances, whether that is a new benefit, a second income, or income that has passed £100,000, and wait for the corrected coding notice. Keep the notice, because it lists every adjustment behind the code, and it is the document that explains why your tax-free pay is what it is.
For anyone who completes Self Assessment, the allowance is claimed in the return rather than through a code, but the figures are the same: £12,570, tapering by £1 for every £2 above £100,000, gone at £125,140. The return reconciles the year as a whole, which is why a taper that payroll missed during the year shows up there instead.
This article has stayed deliberately narrow: one allowance, its 2026/27 figure, its taper, and its common mistakes. Figures change between tax years, so recheck them on GOV.UK before applying them to another year, and treat anything here as general information about how the system works, not advice about what you personally should do.
Frequently Asked Questions
What is the personal allowance?
The personal allowance is the amount of income you can earn in a tax year before you start paying Income Tax. For 2026/27 the standard amount is £12,570, so income up to that level is taxed at 0%, and only income above it is taxed, in slices, at the rates for each band.
How much is the personal allowance for 2026/27?
The standard personal allowance for 2026/27 is £12,570, covering the tax year from 6 April 2026 to 5 April 2027. GOV.UK’s published rates table also lists £12,570 for 2027/28, so the figure is currently frozen rather than rising with pay or prices.
Does the personal allowance disappear if I earn over £100,000?
It does not disappear at once. Above £100,000 of adjusted net income, it falls by £1 for every £2 above that line, so at £110,000 you keep £7,570 and at £120,000 you keep £2,570. It reaches zero only at £125,140, above which you have no tax-free slice left.
What does the tax code 1257L mean?
The code 1257L means you have the standard personal allowance of £12,570. Multiply the digits by ten to get the allowance, and the letter L means the standard allowance applies with no special adjustment. Scottish taxpayers see S1257L and Welsh taxpayers C1257L, reflecting their own rates.
Why is income between £100,000 and £125,140 sometimes called the 60% trap?
Because two published rules combine in that stretch. Each extra £1 is taxed at the 40% higher rate, and it also removes 50p of tax-free allowance, which is then taxed at 40%, adding 20p. Together that is 60p of Income Tax per extra £1, before National Insurance. There is no official 60% band; it is the effective marginal rate the taper produces.
Where can I check my personal allowance and tax code?
Check your payslip for your tax code, and use HMRC’s Check your Income Tax service, which shows your allowance and code, the tax you have paid so far this year, and what you are likely to pay for the rest of it. If the code looks wrong, tell HMRC about the change in your circumstances so it can issue a corrected code.
