WageThe Personal Allowance 2026-27 (and the £100k Taper)
The Personal Allowance is the £12,570 slice of income you can earn in 2026-27 before income tax begins. It is the same for most people and is built into the standard tax code 1257L, but it is not guaranteed: above £100,000 it is gradually withdrawn, and by £125,140 it has gone entirely.
| Band | Rate | Taxable income (gross) |
|---|---|---|
| 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 |
What the Personal Allowance does
The Personal Allowance sets the point at which income tax starts. The first £12,570 of income each year is taxed at nothing; only income above it enters the 20%, 40% and 45% bands. Because the allowance is applied before any tax rate, it is worth more in cash terms to a higher-rate taxpayer than a basic-rate one, since it shields income that would otherwise be taxed at a higher rate.
For most employees the allowance arrives automatically through the tax code 1257L. The numeric part, 1257, is the allowance with its final digit removed, which is HMRC's shorthand for a £12,570 allowance spread evenly across the year's pay.
The taper above £100,000
Once income passes £100,000, the allowance is withdrawn. The reduction is half of the income earned above that line: for every band of income above £100,000, the allowance falls by half that amount, until it reaches zero at £125,140. The gap between £100,000 and £125,140 is exactly twice the £12,570 allowance, which is why it runs out precisely at £125,140.
The taper is based on adjusted net income, a measure of total taxable income after certain deductions. It is this figure, not gross salary alone, that determines how much allowance survives - which is why the way income is arranged can change the outcome.
How a pension contribution can restore it
Because the taper keys off adjusted net income, a pension contribution can claw the allowance back. A contribution made by relief at source or by salary sacrifice reduces adjusted net income, and reducing it back below £100,000 restores the full £12,570 allowance.
This is why earners who sit just above £100,000 commonly route that slice of income into a pension: keeping adjusted net income under £100,000 preserves the allowance instead of letting it taper away. The effect follows directly from how adjusted net income is measured.
The 1257L code and frozen thresholds
The standard code for a full allowance is 1257L, and it is the reference point the calculators on this site assume unless a different code applies. A different code - or an S prefix for Scottish taxpayers - changes how the allowance is applied but not the underlying £12,570 figure for 2026-27.
The £12,570 allowance, the £100,000 taper start and the £125,140 taper end are all frozen until April 2028. Frozen thresholds combined with rising pay mean more people are drawn into the taper each year, losing part of their allowance without any rule having changed - the fiscal-drag effect.
Frequently asked questions
Who loses the Personal Allowance?
Anyone whose adjusted net income rises above £100,000. The allowance is reduced by half of the income above £100,000, so it disappears completely by £125,140.
Can I get my Personal Allowance back?
The allowance depends on adjusted net income, so a pension contribution that brings adjusted net income back below £100,000 restores the full £12,570 allowance. Gift Aid donations work the same way, because they also reduce adjusted net income.
What is the 1257L tax code?
1257L is the standard code for someone entitled to the full £12,570 Personal Allowance in 2026-27. The 1257 is the allowance with its last digit dropped, and the L marks the basic allowance; Scottish taxpayers see the same code with an S prefix.
General information, not advice. Estimates assume the standard 1257L tax code and typical circumstances; your payslip may differ by a pound or two because HMRC payroll software truncates at each step. Verify with HMRC or an accountant for any decision. WageReckon stores no salary data - the calculators run in your browser.
Rates for the 2026-27 tax year, current as of 24 July 2026. Source: HMRC (gov.uk). Contains public sector information licensed under the Open Government Licence v3.0. Source: HMRC / gov.uk. See how we calculate.