How Much Can You Earn Before Paying Tax in the UK?

Tax-free earnings by pay period

The personal allowance is an annual figure, but PAYE spreads it across the year. With tax code 1257L you get roughly one-twelfth each month. Payroll tables actually use £1,048.25 a month, because tax codes add a few pounds when converted, so your payslip may differ by pennies.

What that means in hours

At the April 2026 National Living Wage of £12.71 an hour, you can work about 19 hours a week all year before reaching £12,570. A full-time worker on the minimum wage (37.5 hours) earns £24,784.50 and pays £2,442.90 income tax and £977.16 NI.

If you have two jobs, you only get one personal allowance. It is normally given to your main job, and the second job is taxed from the first pound under code BR (20%). If your main job does not use the whole allowance, you can ask HMRC to split it.

Other tax-free allowances

These sit on top of the personal allowance in most cases.

When your allowance is higher or lower

• Marriage Allowance: a non-taxpayer can transfer £1,260 of allowance to a basic-rate spouse or civil partner, saving up to £252 a year.
• Blind Person's Allowance is added to your personal allowance if you are registered blind or severely sight impaired.
• Over £100,000: you lose £1 of allowance for every £2 of adjusted net income above £100,000, reaching zero at £125,140.
• Underpaid tax, company benefits or untaxed income: HMRC may reduce your code (for example 1100L) to collect it.

Examples

Part-time worker on £1,000 a month: below both the £1,047.50 tax and £1,048 NI thresholds, so take-home pay is the full £1,000 (unless a pension contribution is deducted).

Student earning £15,000 over the year: income tax is (£15,000 minus £12,570) x 20% = £486 and NI is £194.40. If most was earned in summer, PAYE may over-deduct in those months; HMRC refunds the excess after the tax year, or sooner via your employer if you keep working.

Retiree with the full new State Pension: the 2026/27 full rate is £241.30 a week, about £12,548 a year, so it sits just under the allowance; any private pension on top is taxed.

Tax codes that change your tax-free amount

Your tax code tells your employer how much tax-free pay to give you. The number is your allowance divided by 10. If yours is not 1257L, it is worth checking why in your HMRC personal tax account.

If you are self-employed there is no tax code: the same £12,570 allowance is applied to your profits through Self Assessment, and Class 4 NI also starts at £12,570.

Savings interest on top of a salary

On low and middle incomes you can earn several thousand pounds of interest tax-free on top of your wages, because the starting rate for savings and the personal savings allowance stack.

With a £16,000 salary, non-savings income is £3,430 above the allowance, which shrinks the £5,000 starting rate band to £1,570. Add the £1,000 personal savings allowance and £4,000 of interest is taxed at just £286.00. With a £30,000 salary the starting rate has gone, so only the £1,000 allowance applies and the same £4,000 of interest costs £600.00.

The starting rate disappears completely once other income reaches £17,570. Interest earned inside a cash ISA does not count at all.

Side income: trading, property and lodgers

Small amounts of extra income are covered by three separate allowances, so a side hustle and a lodger do not automatically mean a tax bill.

The £1,000 trading allowance covers gross income (before expenses) from casual work such as selling crafts, tutoring or dog walking. The £1,000 property allowance covers things like renting a driveway. Rent a Room relief covers up to £7,500 a year from a furnished room in your own home (£3,750 each if the income is shared). You cannot use the property allowance and Rent a Room relief on the same income.

Above these limits you do not lose everything. You can deduct the allowance instead of actual expenses, and only the profit above your remaining personal allowance is taxed.

Do you need to tell HMRC? A quick checklist

• PAYE wages or pension only, with the right tax code: no action.
• Gross side-hustle or property income of £1,000 or less: no need to report it.
• Trading income over £1,000: register for Self Assessment by 5 October after the tax year ends.
• Savings interest over your allowances: HMRC gets interest figures from banks and sends you a tax calculation, by letter or in your personal tax account, so you usually do not need to report it yourself.
• Income over £100,000: check your code reflects the allowance taper, or you will underpay.

Pensioners: State Pension plus a small private pension

The full new State Pension of £241.30 a week uses almost all of the £12,570 allowance, so nearly every pound of private or workplace pension is taxed at 20%. HMRC does this by giving the private pension a reduced tax code that accounts for the State Pension, which is paid without tax deducted.

Example: full new State Pension plus a £6,000 workplace pension. About £12,548 of State Pension leaves only £22 of allowance, so roughly £5,978 of the private pension is taxed at 20%, about £1,196 a year, collected through the private pension's tax code. If you have no private pension and your State Pension alone is above the allowance, HMRC sends a Simple Assessment letter instead.