How much can I earn before paying tax in 2025/26?

You can earn up to £12,570 per year before paying income tax. This is the Personal Allowance for the 2025/26 tax year. It applies to all UK taxpayers and has been frozen at this level since 2021/22.

What other tax-free allowances are there?

In addition to the £12,570 Personal Allowance, you get: £500 dividend allowance (tax-free dividends), £1,000 Personal Savings Allowance (basic rate taxpayers), £1,000 trading allowance (for self-employed income), £3,000 CGT annual exempt amount, and £12,570 NI Primary Threshold (no NI below this).

Do I pay National Insurance on earnings below £12,570?

No. The NI Primary Threshold is aligned with the Personal Allowance at £12,570. You don't pay employee NI on earnings below this amount, though you build NI credits from £6,396.

How Much Can I Earn Tax-Free in 2025/26?

You can earn up to £12,570 per year before paying any income tax in the 2025/26 tax year. This is your Personal Allowance. It applies to employment income, self-employed profits, pension income, and most other taxable income. The Personal Allowance has been frozen at £12,570 since 2021/22.

All tax-free allowances (2025/26)

Allowance	Amount	Applies to
Personal Allowance	£12,570	All income
NI Primary Threshold	£12,570	Employment income
Dividend Allowance	£500	Dividend income
Personal Savings Allowance	£1,000	Savings interest (basic rate)
Trading Allowance	£1,000	Self-employed income
Property Allowance	£1,000	Rental income
CGT Annual Exempt Amount	£3,000	Capital gains
Marriage Allowance	£1,260	Transferable to spouse

Important caveats

The Personal Allowance is reduced if you earn over £100,000 (£1 lost for every £2 above the threshold). It is completely withdrawn at £125,140.
The Personal Savings Allowance is £1,000 for basic rate taxpayers, £500 for higher rate, and £0 for additional rate.
These allowances generally cannot be combined or stacked — they apply to different types of income.
ISA savings are completely tax-free with no limit on the growth (annual contribution limit: £20,000).
Married couples and civil partners can transfer up to £1,260 of their Personal Allowance to their partner under the Marriage Allowance, saving up to £252 per year in tax.

Understanding all of your available tax-free allowances is important for effective tax planning. Many people pay more tax than necessary simply because they are unaware of allowances they could be using.

ISA allowances

In addition to the allowances above, you can save up to £20,000 per year in Individual Savings Accounts (ISAs) where all interest, dividends, and capital gains are completely tax-free. This can be split across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs (up to £4,000 of the total). There is no limit on the total value of your ISA holdings, only on the amount you can contribute each tax year. ISA savings do not count towards your income for tax purposes.

How allowances interact

The Personal Allowance reduces your taxable income first, before other allowances apply. For example, if you earn £25,000 from employment and receive £2,000 in dividends, your employment income is reduced by the £12,570 Personal Allowance first. You then pay 20% on the remaining £12,430 of employment income. Your dividends sit on top, with the first £500 covered by the Dividend Allowance and the remaining £1,500 taxed at the dividend basic rate of 8.75%. Each allowance applies independently to its own type of income, so you benefit from all of them simultaneously if you have multiple income sources.

Source: HMRC — Income Tax rates and Personal Allowances. Last updated: April 2025.