Personal Allowance Calculator UK 2025/26
Calculate your tax-free personal allowance for 2025/26. See how the £100,000 income taper reduces your allowance, calculate the extra tax cost, and discover pension contribution strategies that could save you thousands.
Calculation Breakdown
Personal Allowance Rates 2025/26
| Tax Year | Personal Allowance | Income Limit for PA | Change |
|---|---|---|---|
| 2025/26 | £12,570 | £100,000 | Frozen |
| 2024/25 | £12,570 | £100,000 | Frozen |
| 2023/24 | £12,570 | £100,000 | Frozen |
| 2022/23 | £12,570 | £100,000 | Frozen |
| 2021/22 | £12,570 | £100,000 | +£70 |
| 2020/21 | £12,500 | £100,000 | +£130 |
| 2019/20 | £12,370 | £100,000 | +£650 |
Personal Allowance by Income Level
| Adjusted Net Income | Personal Allowance | Allowance Lost | Extra Tax Cost |
|---|---|---|---|
| £95,000 | £12,570 | £0 | £0 |
| £100,000 | £12,570 | £0 | £0 |
| £105,000 | £10,070 | £2,500 | £1,000 |
| £110,000 | £7,570 | £5,000 | £2,000 |
| £115,000 | £5,070 | £7,500 | £3,000 |
| £120,000 | £2,570 | £10,000 | £4,000 |
| £125,140 | £0 | £12,570 | £5,028 |
| £130,000+ | £0 | £12,570 | £5,028 |
How Personal Allowance Tapering Works
The personal allowance is the amount of income you can earn each tax year before you start paying income tax. For 2025/26, the standard personal allowance is £12,570. However, if your adjusted net income exceeds £100,000, HMRC reduces your personal allowance through a mechanism known as tapering.
The tapering rule is straightforward: for every £2 of adjusted net income above £100,000, your personal allowance is reduced by £1. This continues until your personal allowance reaches zero, which happens at an income of £125,140 (calculated as £100,000 + £12,570 × 2).
What makes this particularly punishing is the effective tax rate it creates. In the £100,000 to £125,140 income band, you pay 40% income tax on each additional pound earned, but you also lose 50p of tax-free allowance for every £1 earned. That lost allowance was shielding income from 40% tax, so you effectively lose another 20% in tax relief. The combined result is an effective marginal tax rate of 60% on income between £100,000 and £125,140.
Worked Example: £110,000 Income
Consider someone earning £110,000 in 2025/26:
- Income over £100,000: £10,000
- Allowance reduction: £10,000 / 2 = £5,000
- Remaining personal allowance: £12,570 - £5,000 = £7,570
- Extra tax from losing £5,000 of allowance: £5,000 × 40% = £2,000
- Effective marginal rate in taper zone: 60%
This person pays £2,000 more in income tax than they would if the taper did not exist — purely because of the personal allowance reduction. On top of the standard 40% higher-rate tax, the taper adds an extra 20% effective charge on every pound earned between £100,000 and £125,140.
Marriage Allowance Transfer
The Marriage Allowance allows you to transfer 10% of your personal allowance — £1,260 for 2025/26 (rounded from £1,257) — to your spouse or civil partner. This can reduce the recipient's tax bill by up to £252 per year.
To be eligible:
- The transferring partner must be a non-taxpayer (income below £12,570)
- The receiving partner must be a basic-rate taxpayer (income between £12,571 and £50,270)
- You must be married or in a civil partnership
If you are transferring your allowance, your personal allowance reduces from £12,570 to £11,310. Your partner's tax-free amount increases by £1,260, saving them £252 in income tax (£1,260 × 20%).
You can apply for Marriage Allowance online through your Government Gateway account or by calling HMRC. Claims can be backdated up to four years. For a detailed breakdown, use our Marriage Allowance Calculator.
Blind Person's Allowance
The Blind Person's Allowance for 2025/26 is £3,070. This is an additional tax-free amount added on top of your standard personal allowance, giving eligible individuals a total tax-free allowance of up to £15,640.
To qualify for Blind Person's Allowance, you must be registered as severely sight impaired (or blind) with your local authority in England and Wales, or unable to perform any work for which eyesight is essential in Scotland and Northern Ireland.
Key points about Blind Person's Allowance:
- It is added to your personal allowance — not a separate deduction
- Unlike the standard personal allowance, it is not subject to income tapering above £100,000
- If you cannot use all of it, you can transfer the unused portion to your spouse or civil partner
- You claim it by contacting HMRC or including it in your Self Assessment return
How to Reduce Adjusted Net Income
If your income is between £100,000 and £125,140, reducing your adjusted net income below £100,000 can restore your full personal allowance and save you a significant amount in tax. Here are the most effective strategies:
Pension Contributions (Most Effective)
Pension contributions are the single most powerful tool for reducing adjusted net income. Every pound you contribute to a pension reduces your adjusted net income by £1, and in the taper zone each £1 of pension contribution effectively saves you 60p in tax (40% income tax plus 20% from restoring your personal allowance).
For example, if your income is £115,000, contributing £15,000 to your pension would reduce your adjusted net income to £100,000, restoring your full £12,570 personal allowance. The tax saving would be £15,000 × 60% = £9,000. Your pension contribution of £15,000 effectively costs you only £6,000 after all the tax benefits.
You can contribute to a workplace pension through salary sacrifice (which also saves National Insurance) or make personal contributions that are grossed up automatically.
Gift Aid Donations
Charitable donations made through Gift Aid reduce your adjusted net income. When you donate £80 to charity, the charity claims £20 from HMRC (basic-rate tax relief), making the gross donation £100. As a higher-rate taxpayer, you can claim the additional 20% relief through your tax return, and the full £100 is deducted from your adjusted net income.
In the taper zone, Gift Aid is particularly efficient. A gross donation of £1,000 saves you £600 in tax (40% income tax relief plus 20% from personal allowance restoration), meaning the actual cost of giving £1,000 to charity is just £400.
Salary Sacrifice
Salary sacrifice arrangements with your employer — for pensions, cycle-to-work schemes, electric vehicles, or childcare vouchers — reduce your gross salary before tax. This is especially valuable in the taper zone because it reduces both your income tax and National Insurance simultaneously while restoring your personal allowance.
Trading Losses
If you have trading losses from self-employment or partnership income, you can offset these against your other income. This reduces your adjusted net income and may restore some or all of your personal allowance. Losses can be carried forward or set against income from the previous year.
Sarah earns £95,000 as a marketing director. Her adjusted net income is below £100,000, so she receives the full £12,570 personal allowance. Her first £12,570 of income is completely tax-free. She pays 20% on income between £12,571 and £50,270, and 40% on income between £50,271 and £95,000. No taper applies.
James earns £110,000 as a software engineer. His personal allowance is reduced to £7,570 (losing £5,000), costing him an extra £2,000 in tax. His effective marginal rate in the £100K-£110K band is 60%.
Pension rescue: If James contributes £10,000 to his pension, his adjusted net income falls to £100,000. This restores his full £12,570 allowance. The tax saving is £10,000 × 60% = £6,000. His £10,000 pension contribution effectively costs him just £4,000 out of pocket.
Rachel earns £130,000 as a finance manager. Her adjusted net income exceeds £125,140, so her personal allowance is completely eliminated — £0. Every pound she earns from the first penny is subject to income tax. The total extra tax from losing the full allowance is £12,570 × 40% = £5,028 per year compared to someone earning just under £100,000.
At this income level, pension contributions still provide 40% tax relief but no longer restore any personal allowance (since income would need to drop below £125,140 first). Rachel would need to contribute over £30,000 to reach the £100,000 threshold and fully restore her allowance.
Personal Allowance Rates 2025/26
The personal allowance has been frozen at £12,570 since the 2021/22 tax year. This freeze, originally set to last until April 2026, was extended by the government to April 2028. The effect of this freeze is significant: as wages rise with inflation, more people are pulled into higher tax brackets and the personal allowance erodes in real terms.
Before the freeze, the personal allowance increased each year roughly in line with CPI inflation. Between 2010/11 (when it was £6,475) and 2021/22 (£12,570), the allowance nearly doubled. The current freeze effectively represents a stealth tax increase — the Office for Budget Responsibility estimates that freezing tax thresholds will bring an additional 4 million people into paying income tax by 2028/29 compared to if the thresholds had risen with inflation.
The £100,000 income limit for the personal allowance has never been changed since it was introduced in April 2010. Combined with the frozen personal allowance, this means the taper zone (£100,000 to £125,140) has also remained static for over five years.
Understanding Adjusted Net Income
Adjusted net income is the figure HMRC uses to determine whether your personal allowance should be tapered. It is not simply your gross salary. Adjusted net income is calculated as:
Adjusted Net Income = Total Income - Pension Contributions - Gift Aid (Gross) - Trading Losses
Total income includes all sources: employment income, self-employment profits, rental income, dividends, savings interest, and other investment income. Pension contributions and Gift Aid donations are deducted to arrive at the adjusted net income figure.
This is why pension contributions and Gift Aid are so effective at reducing the taper — they directly reduce the figure that HMRC uses to calculate your personal allowance reduction.
Official Sources & References
Frequently Asked Questions
The personal allowance for 2025/26 is £12,570. This is the amount you can earn before paying any income tax. It has been frozen at this level since the 2021/22 tax year and the government has confirmed it will remain at £12,570 until at least April 2028. If your adjusted net income exceeds £100,000, the personal allowance is reduced by £1 for every £2 above that threshold.
If your adjusted net income exceeds £100,000, your personal allowance is reduced by £1 for every £2 of income above that threshold. This means you lose your allowance at a rate of 50p per pound of income. The entire £12,570 allowance is wiped out once your income reaches £125,140. The taper creates an effective 60% marginal tax rate in the £100,000 to £125,140 band — 40% income tax plus the loss of allowance worth 20%.
Your personal allowance is completely eliminated at an adjusted net income of £125,140. This is because the £12,570 allowance is reduced by £1 for every £2 above £100,000, so: £100,000 + (£12,570 × 2) = £125,140. Above this level, you have no tax-free income — every pound is taxed from the first penny.
You can transfer 10% of your personal allowance (£1,260 for 2025/26) to your spouse or civil partner through the Marriage Allowance. The transferring partner must earn below £12,570 (a non-taxpayer), and the receiving partner must be a basic-rate taxpayer earning no more than £50,270. The tax saving is £252 per year. Claims can be backdated up to four years. Apply online at gov.uk/marriage-allowance.
The Blind Person's Allowance for 2025/26 is £3,070. It is an additional tax-free amount on top of the standard personal allowance, giving eligible individuals a total of £15,640 before tax. To qualify, you must be registered as severely sight impaired with your local authority. The Blind Person's Allowance is not subject to the £100K income taper that affects the standard personal allowance. If you cannot use all of it, the unused portion can be transferred to your spouse or civil partner.
The most effective strategy is to reduce your adjusted net income below £100,000 through pension contributions. In the taper zone (£100,000 to £125,140), pension contributions receive an effective 60% tax relief — 40% income tax relief plus the value of restoring your personal allowance. Gift Aid donations, salary sacrifice arrangements, and offsetting trading losses also reduce adjusted net income. For example, earning £112,000 and making a £12,000 pension contribution brings you to exactly £100,000, restoring your full £12,570 allowance and saving £7,200 in tax.
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Official Sources
UK Calculator Editorial Team
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