How much can you earn before paying tax UK?

Most people can earn up to £12,570 per year before paying Income Tax — this is the standard Personal Allowance for 2025/26 and 2026/27. However, you can earn more than this tax-free when you add other allowances: up to £1,000 from a side business (trading allowance), up to £500–£1,000 from savings interest (depending on your tax band), and up to £500 from dividends. Below the table shows every tax-free allowance available.

Do I pay tax on two jobs?

Your Personal Allowance (£12,570) is usually applied to your main job. If you have a second job, you will typically pay tax from the first pound you earn in that second job because your full tax-free allowance is already used by your main job. However, you can ask HMRC to split your Personal Allowance across two jobs. Your total tax-free amount stays the same — £12,570 — regardless of how many jobs you have.

At what age do you stop paying tax UK?

There is no age at which you stop paying tax. If your income exceeds the Personal Allowance (£12,570), you pay Income Tax regardless of age. The State Pension counts as taxable income, so if your State Pension plus any other income exceeds £12,570, you will pay tax on the excess. However, pensioners may qualify for Marriage Allowance transfer or Pension Credit which can reduce their tax bill.

Do I lose my Personal Allowance if I earn over £100,000?

Yes — once your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 of income above £100,000. This means your Personal Allowance is completely removed at £125,140. The effective marginal tax rate in this band is 60% (you lose 40p in allowance for every extra £1 earned, on top of 40% tax). Making pension contributions can bring your income below £100,000 and restore your full allowance.

How Much Can I Earn Tax-Free in the UK? (2025/26 & 2026/27)

Everyone in the UK gets several tax-free allowances. Here is every allowance you can use to earn income without paying tax.

The Short Answer

Most people can earn £12,570 per year tax-free from employment or self-employment. But there are additional allowances on top of this.

Complete Tax-Free Allowances — 2025/26 and 2026/27

Allowance	Tax-free amount	What it covers
Personal Allowance	£12,570 per year	Employment income, self-employment profits, pension income
Trading Allowance	£1,000 per year	Side income from self-employment or casual work
Property Allowance	£1,000 per year	Income from renting property (e.g. spare room via Airbnb)
Rent a Room Scheme	£7,500 per year	Income from letting a furnished room in your home
Personal Savings Allowance (basic rate)	£1,000 per year	Interest from savings accounts
Personal Savings Allowance (higher rate)	£500 per year	Interest from savings accounts
Personal Savings Allowance (additional rate)	£0	No allowance — all interest taxed
Starting Rate for Savings	Up to £5,000	If your non-savings income is below £12,570
Dividend Allowance	£500 per year	Dividends from shares or your own company
ISA Allowance	£20,000 per year	All returns within ISAs — interest, dividends, capital gains
Capital Gains Tax Annual Exempt Amount	£3,000 per year	Profits from selling assets (shares, property, crypto)
Marriage Allowance	£1,260 transfer	Transfer 10% of Personal Allowance to spouse/civil partner
Junior ISA	£9,000 per year	Savings and investments for under-18s — tax-free
Lifetime ISA	£4,000 per year (within ISA allowance)	25% government bonus for house purchase or retirement
National Insurance threshold	£12,570 per year	No NI on earnings below this (employees)
Trivial benefits (employed)	£50 per benefit	Small non-cash benefits from your employer
Pension Annual Allowance	£60,000 per year	Tax relief on pension contributions

Income Tax Bands — 2025/26 and 2026/27

Band	Rate	Taxable income
Personal Allowance	0%	£0–£12,570
Basic rate	20%	£12,571–£50,270
Higher rate	40%	£50,271–£125,140
Additional rate	45%	Over £125,140

Scotland has different tax bands:

Band	Rate	Taxable income
Personal Allowance	0%	£0–£12,570
Starter rate	19%	£12,571–£14,876
Basic rate	20%	£14,877–£26,561
Intermediate rate	21%	£26,562–£43,662
Higher rate	42%	£43,663–£75,000
Advanced rate	45%	£75,001–£125,140
Top rate	48%	Over £125,140

National Insurance Thresholds — 2025/26

Threshold	Amount	NI rate
Below Primary Threshold	Under £12,570/year	0%
Primary Threshold to Upper Earnings Limit	£12,571–£50,270/year	8% (employees)
Above Upper Earnings Limit	Over £50,270/year	2% (employees)

Self-employed NI (Class 4):

Threshold	NI rate
Below Lower Profits Limit (£12,570)	0%
£12,571–£50,270	6%
Over £50,270	2%

Common Scenarios — Tax-Free Income

Scenario	Tax-free amount
Employee, no savings or investments	£12,570
Employee with savings interest	£12,570 + £1,000 savings allowance = £13,570
Employee with dividends	£12,570 + £500 dividend allowance = £13,070
Employee with side hustle under £1,000	Employment income up to £12,570 tax-free + £1,000 trading allowance on top
Self-employed only income	£12,570 (or £13,570 if income under £17,570 and uses starting rate for savings)
Renting out a spare room	£7,500 Rent a Room + £12,570 Personal Allowance on other income
Student with a part-time job	£12,570 — students get the full Personal Allowance
Pensioner (State Pension only)	State Pension is taxable but if under £12,570, no tax to pay
ISA saving	Any amount within £20,000/year ISA limit — all returns tax-free, no limit on total pot

The £100,000 Trap — Losing Your Personal Allowance

Income	Personal Allowance	Effective marginal rate
Up to £100,000	£12,570	40%
£100,001	£12,569.50	60%
£110,000	£7,570	60%
£120,000	£2,570	60%
£125,140	£0	40% (back to normal higher rate)
Over £125,140	£0	45%

Between £100,000 and £125,140, your effective marginal tax rate is 60% because you’re losing £1 of Personal Allowance for every £2 earned.

How to Avoid the £100,000 Trap

Strategy	Effect
Pension contributions	Reduce adjusted net income below £100,000
Salary sacrifice	Same effect — reduces your taxable income
Gift Aid donations	Extend your basic rate band and can reduce adjusted net income
Spreading income over tax years	If possible, defer bonuses or income to a lower-earning year

Key Facts

Question	Answer
When does the tax year start?	6 April
When does the tax year end?	5 April
Will the Personal Allowance increase?	Frozen at £12,570 until at least April 2028
Is the State Pension taxable?	Yes — but collected through reduced Personal Allowance on other income, not through a tax code on the pension itself
Do children pay tax?	Yes, if they earn over £12,570 — they have the same Personal Allowance as adults
Is Universal Credit taxable?	No — benefits are generally not taxable