Finance > Tax (employee Focus)
Tax-Free Personal Allowance
Your personal allowance is the amount that you can earn before paying any income tax.
The standard personal allowance for the 2022/23 tax year is £12,570.
Restricted Personal Allowance
If you start to earn over £100,000, your personal allowance will be reduced.
Your personal allowance is reduced by £1 for every £2 you earn over £100,000.
This means that for the 2022/23 tax year, if you earn £125,140 or more, your personal allowance is reduced to zero. A restricted personal allowance should be reflected within your tax code.
If you start to earn over £100,000, your personal allowance will be reduced.
Your personal allowance is reduced by £1 for every £2 you earn over £100,000.
This means that for the 2022/23 tax year, if you earn £125,140 or more, your personal allowance is reduced to zero. A restricted personal allowance should be reflected within your tax code.
Example:
Say you earn £104,000.
1. How much is this over £100,000?
£104,000 – £100,000 = £4,000
2. Restrict personal allowance by £1 for every £2 over £100,000
£4,000 / 2 = £2,000
3. Available personal allowance
£12,570 – £2,000 = £10,570