Last Updated On 08.10.2026
If you are wondering how much can you earn before paying tax, the standard answer for the 2026/27 tax year is £12,570. This is the UK Personal Allowance for most people, meaning you normally pay no Income Tax on the first £12,570 of taxable income you receive between 6 April 2026 and 5 April 2027.
The position can change with high income, multiple jobs, taxable benefits, side income or Scottish tax rates. National Insurance is calculated separately.
How Much Can You Earn Tax-Free in 2026/27?
For someone entitled to the full £12,570 Personal Allowance, the equivalent amounts are:
| Period | Approximate Tax-Free Income |
|---|---|
| Per year | £12,570 |
| Per month | £1,047.50 |
| Per week | £241.73 |
| Per day | £34.44 |
These are annual-allowance equivalents, not separate allowances. PAYE deductions can vary with your tax code and pay pattern.
The National Living Wage for workers aged 21 and over is £12.71 an hour from April 2026. At that rate, earning £12,570 is roughly equivalent to 989 hours a year, or about 19 hours a week over 52 weeks, before considering other taxable income.
What Are the Income Tax Bands for 2026/27?
For England, Wales and Northern Ireland, the main 2026/27 Income Tax bands are:
| Income Level | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 to £50,270 | 20% |
| £50,271 to £125,140 | 40% |
| Over £125,140 | 45% |
Welsh Income Tax rates are set separately, but they match these rates and thresholds for 2026/27.
Crossing a tax threshold does not mean your whole salary is taxed at the higher rate. If your pay rises from £50,000 to £52,000, only the part of your taxable income that falls above the higher-rate threshold is taxed at 40%.
The Personal Allowance and main higher-rate threshold are scheduled to remain frozen until 5 April 2031. Wage growth can therefore pull more income into tax through fiscal drag. See Personal Allowance allocation changes for the wider effect.
What Happens If You Earn More Than £100,000?
Your Personal Allowance starts to reduce once adjusted net income exceeds £100,000. You lose £1 of allowance for every £2 of income above £100,000, and the allowance disappears completely at £125,140.
| Adjusted Net Income | Personal Allowance |
|---|---|
| £100,000 | £12,570 |
| £110,000 | £7,570 |
| £120,000 | £2,570 |
| £125,140 or more | £0 |
This creates an effective 60% Income Tax rate on part of the income between £100,000 and £125,140. Moving from £110,000 to £120,000 can create about £6,000 of extra Income Tax because £5,000 of tax-free allowance is also lost.
Pension contributions and Gift Aid can reduce adjusted net income in some circumstances, which may help restore part of the Personal Allowance. The exact point at which the allowance is lost is explained further in when you lose your Personal Allowance.
How Much Side Income Can You Earn Before Paying Tax?
The £1,000 trading allowance is separate from the £12,570 Personal Allowance. It applies to qualifying gross trading income from activities such as freelancing, selling goods as a business, tutoring, delivery work or other casual services.
The important rules are:
- The £1,000 limit is based on gross income before expenses, not profit.
- You get one £1,000 trading allowance across qualifying side hustles, not £1,000 for each one.
- If qualifying gross trading income is £1,000 or less, you may not need to tell HMRC about it.
- If it is more than £1,000, you generally need to check whether you must register for Self Assessment.
- When calculating taxable profit, you can normally use the £1,000 trading allowance or deduct actual allowable expenses, but not both against the same income.
For example, on £2,400 turnover with £600 of expenses, the £1,000 allowance leaves £1,400 taxable, while deducting actual expenses leaves £1,800 taxable.
There is also a separate £1,000 property allowance for qualifying property income. The Rent a Room Scheme can provide up to £7,500 of tax-free rental income where its conditions are met.
A PAYE job does not automatically settle tax on self-employed side income. A second job paid through payroll is normally taxed through PAYE.
A simpler online reporting route for people with certain gross side income between £1,000 and £3,000 is planned by 2029, but the current £1,000 reporting rules still apply for now.
If you first needed to register for Self Assessment for 2025/26, the 5 October 2026 notification deadline has now passed. Registering promptly is important, while the normal online filing and payment deadline for 2025/26 is 31 January 2027.
Do You Pay More Tax on a Second Job?
You still have only one Personal Allowance across your taxable income. It is usually allocated to your main employment, so a second job may be taxed from the first pound through a code such as BR or D0.
The standard tax code for many people with one job or pension is 1257L. Emergency versions used in 2026/27 can include 1257L W1, 1257L M1 and 1257L X.
Your overall liability depends on total taxable income and correct tax codes. If a code looks wrong, why a tax code has changed covers common PAYE adjustments.
If too much tax has been deducted because of an incorrect or temporary code, you may be able to receive a refund or have the position corrected through PAYE.
How Much Can You Earn Before Paying National Insurance?
National Insurance is separate from Income Tax. For most employees in 2026/27, employee Class 1 National Insurance starts above £242 a week or £1,048 a month.
| Type | 2026/27 Threshold or Band | Rate |
|---|---|---|
| Employee Class 1 | £12,570 to £50,270 equivalent | 8% |
| Employee Class 1 | Above £50,270 equivalent | 2% |
| Self-Employed Class 4 | Profits £12,570 to £50,270 | 6% |
| Self-Employed Class 4 | Profits above £50,270 | 2% |
For self-employed people, the Small Profits Threshold is £7,105. Where profits reach that level, Class 2 contributions can generally be treated as paid for benefit entitlement without a separate Class 2 charge. People with lower profits may be able to pay voluntary Class 2 contributions at £3.65 a week.
National Insurance gaps can affect State Pension entitlement. See whether you can get a pension if you have never paid National Insurance for the qualifying-year position.
What Could Your Take-Home Pay Look Like?
For an employee in England, Wales or Northern Ireland with a standard Personal Allowance, standard employee Class 1 National Insurance, no pension deductions and no student loan, approximate 2026/27 figures are:
| Salary | Income Tax | Employee NI | Approx. Take-Home |
|---|---|---|---|
| £20,000 | £1,486 | £594 | £17,920 |
| £30,000 | £3,486 | £1,394 | £25,120 |
| £40,000 | £5,486 | £2,194 | £32,320 |
| £50,000 | £7,486 | £2,994 | £39,520 |
| £60,000 | £11,432 | £3,211 | £45,357 |
At £60,000, the first £12,570 is covered by the Personal Allowance, £37,700 is taxed at 20% and £9,730 at 40%. Only the slice in each band uses that rate.
What Other Tax-Free Allowances Apply in 2026/27?
Different allowances apply to different types of income and circumstances, so they cannot simply be added together in every case.
| Allowance or Threshold | 2026/27 Position |
|---|---|
| Blind Person’s Allowance | £3,250 |
| Marriage Allowance transfer | £1,260, reducing a partner’s tax by up to £252 |
| Personal Savings Allowance | £1,000 basic rate, £500 higher rate, £0 additional rate |
| Starting rate for savings | Up to £5,000 at 0% for eligible low-income savers |
| Dividend Allowance | £500 |
| Trading allowance | Up to £1,000 |
| Property allowance | Up to £1,000 |
| Rent a Room limit | Up to £7,500 |
| Capital Gains Tax annual exempt amount | £3,000 |
| Inheritance Tax nil-rate band | £325,000 |
Dividend income above the £500 allowance is taxed at 10.75%, 35.75% or 39.35% in 2026/27 depending on the applicable band.
Marriage Allowance is different from Married Couple’s Allowance. Married Couple’s Allowance is for eligible married couples or civil partners where at least one person was born before 6 April 1935.
The High Income Child Benefit Charge also matters for some households. It starts when adjusted net income exceeds £60,000 and is fully clawed back once adjusted net income reaches £80,000.
Do Pensioners Pay Income Tax?
Yes, pensioners can pay Income Tax if their total taxable income exceeds their available allowances. State Pension is taxable even though tax is not normally deducted directly from the State Pension payment itself.
The full new State Pension is £241.30 a week in 2026/27, about £12,547.60 over 52 weeks. It is therefore only slightly below the standard Personal Allowance, so other taxable income can create a tax liability.
Most employees stop paying employee National Insurance once they reach State Pension age, although Income Tax can still apply. Current pension amounts and how they interact with tax are covered in the 2026/27 State Pension increase.
Up to 25% of pension benefits can often be taken tax-free, subject to lump-sum rules, while taxable withdrawals count towards Income Tax bands.
What Are the Scottish Income Tax Rates for 2026/27?
Scotland uses different rates for non-savings and non-dividend income.
| Scottish Band | Income Range | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter | £12,571 to £16,537 | 19% |
| Basic | £16,538 to £29,526 | 20% |
| Intermediate | £29,527 to £43,662 | 21% |
| Higher | £43,663 to £75,000 | 42% |
| Advanced | £75,001 to £125,140 | 45% |
| Top | Over £125,140 | 48% |
Savings interest and dividends continue to use UK-wide rules rather than the Scottish earned-income bands.
What Does Making Tax Digital Mean for Self-Employed People?
Making Tax Digital for Income Tax became mandatory from April 2026 for qualifying sole traders and landlords with qualifying gross self-employment and property income above £50,000. The threshold falls to above £30,000 from April 2027 and above £20,000 from April 2028.
People in scope must keep digital records, use compatible software and send quarterly updates. For many people using standard quarterly periods, the second update for 2026/27 is due by 7 November 2026.
Conclusion
For most people asking how much can you earn before paying tax, the 2026/27 starting point is £12,570. Your final bill depends on total income, tax code, location, National Insurance and other allowances.
The key distinction is that the £12,570 Personal Allowance is not the same as the £1,000 trading allowance, savings allowances or dividend allowance. Checking each income source separately is the safest way to avoid underpaying or overpaying tax.
Frequently Asked Questions
How Much Can I Earn Per Month Before Paying Tax?
The £12,570 annual Personal Allowance is approximately £1,047.50 per month. Your actual PAYE deduction can differ because tax codes and cumulative payroll calculations affect how the allowance is applied.
Do I Pay Tax on a Second Job?
Potentially, yes, because your Personal Allowance normally cannot be used in full against both jobs. Your second job may use a BR, D0 or another tax code depending on your total expected income.
How Much Side Income Can I Earn Without Telling HMRC?
Qualifying gross trading income of £1,000 or less may be covered by the trading allowance, subject to the rules and exclusions. If total qualifying gross trading income exceeds £1,000, you should check whether you need to register and report it.
What Is the 1257L Tax Code?
1257L is the standard tax code for many people entitled to the full £12,570 Personal Allowance. It can change where you have taxable benefits, untaxed income, previous underpayments or more than one income source.
Do I Pay Tax on Savings Interest if I Earn Under £12,570?
Not necessarily. Low-income savers may benefit from the Personal Allowance, the starting rate for savings and the Personal Savings Allowance, depending on their other income.
Does a Pay Rise Into the 40% Band Make Me Worse Off?
Normally no, because only the slice of taxable income above the higher-rate threshold is taxed at 40%. Other factors such as benefit withdrawals, student loan repayments or the Personal Allowance taper can still affect the overall gain in take-home pay.
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