If you’ve ever tried to figure out how much you can earn before paying tax in the UK, you’ve likely ended up frustrated. Between allowances, thresholds, side-hustle rules, and confusing terms on GOV.UK, getting a clear answer isn’t always easy. And with the UK’s frozen tax bands running until 2028, more people are drifting into tax for the first time—even without a pay rise.
The good news? You can understand it quickly once you know the rules.
This guide breaks down exactly how much you can earn before paying tax in 2025, how the allowance works, what income counts, and what you can legally do to reduce your taxable income. Everything here is updated for the 2025/26 UK tax year, explained in a way that’s practical and easy to apply.
How Much Can You Earn Before Paying Tax in 2025?
The amount you can earn before paying Income Tax in the UK for 2025/26 is:
£12,570 per year
That is your Personal Allowance—the amount you can earn tax-free from your total income.
Broken down, this equals:
| Period | Tax-free amount |
|---|---|
| Year | £12,570 |
| Month | £1,047.50 |
| Week | £241.73 |
| Day (approx.) | £34.50 |
You only start paying tax once your income goes above these amounts.
But here’s the important part:
- You don’t pay tax on your entire income.
- You only pay tax on the portion above the £12,570 threshold.
Tax Bands After You Cross the Threshold
Once you exceed the tax-free allowance, your earnings fall into these tax brackets:
| Band | Tax Rate | Income Range |
|---|---|---|
| Personal Allowance | 0% | £0–£12,570 |
| Basic Rate | 20% | £12,571–£50,270 |
| Higher Rate | 40% | £50,271–£125,140 |
| Additional Rate | 45% | £125,141+ |
Quick examples:
- If you earn £15,000, you pay 20% only on £2,430.
- If you earn £30,000, you pay 20% on £17,430.
- If you earn £50,000, you pay 20% on £37,430.
- If you earn £120,000, your Personal Allowance starts to reduce (explained next).
When the Personal Allowance Reduces (High Earners £100k+)
The UK has a taper system:
- For every £2 you earn above £100,000, you lose £1 of your Personal Allowance.
- This means at £125,140, your allowance becomes £0.
This creates the infamous 60% effective tax rate zone, because you’re losing tax-free income and paying tax at the same time.
Example
If you earn £110,000:
- You exceed the threshold by £10,000
- You lose £5,000 of your Personal Allowance
- You now only have £7,570 tax-free instead of £12,570
Does All Income Count Toward the Tax-Free Threshold?
Not everything counts—but a lot does.
✔ taxable Income
- Salary and wages
- Freelancing income
- Self-employment profits
- Side-hustle earnings (Vinted, Depop, eBay)
- Rental income (after allowance)
- Tips and commissions
- Some benefits
- Overseas income (in many cases)
- Pension income
Non-Taxable Income
These do not reduce your Personal Allowance:
- ISA interest
- Premium Bonds winnings
- Lottery wins
- Child Benefit
- Certain disability benefits
- Some savings income (depending on allowances)
How Much Can You Earn on Vinted Before Paying Tax?
This is one of the fastest-rising search queries in the UK.
The answer is simple:
🔹 You can earn up to £1,000 tax-free from selling on Vinted per tax year
This falls under the Trading Allowance.
When do you owe tax?
You may need to register for Self Assessment if:
- You sell items with the intent to profit
- You buy items to resell
- You exceed the £1,000 allowance
- HMRC sees your activity as a trading business
Simple example:
- Earn £800 in a year → no tax
- Earn £1,200 → £200 becomes taxable
- Earn £5,000 → £4,000 becomes taxable after allowance
The £1,000 Property Allowance
If you rent out a driveway, spare room (not via the Rent-a-Room Scheme), storage space, garden space, etc., the first £1,000 is tax-free.
If you rent out a room in your home, the Rent-a-Room Scheme allows up to £7,500 tax-free.
Common Mistakes People Make With the Tax-Free Allowance
Most people run into tax problems because of one of these:
Mistake 1: Thinking each income source has its own £12,570 allowance
No—your allowance applies to your total income.
Mistake 2: Forgetting that freelance or Vinted income counts
HMRC sees this as income unless covered by the £1,000 allowance.
Mistake 3: Confusing gross vs taxable pay
Pension contributions, benefits-in-kind, and salary sacrifice can change your taxable figure.
Mistake 4: Not adjusting tax codes after changing jobs
Wrong tax codes = overpaying or underpaying.
Mistake 5: Missing Marriage Allowance eligibility
If one partner earns under £12,570, they can transfer up to £1,260 of their allowance.
2025 Tax Planning Tips to Reduce What You Owe
These are fully legitimate, commonly used methods:
1. Increase Pension Contributions
- Lowers your taxable income
- Can bring you back under £50k or £100k thresholds
- Helps reclaim Personal Allowance
2. Use Salary Sacrifice
Useful for:
- Pension
- Electric car schemes
- Cycle to Work
- Childcare support
This reduces taxable income instantly.
3. Take Advantage of the Savings Allowance
- Basic rate taxpayers get a £1,000 allowance
- Higher rate gets £500
- Additional rate gets £0
4. Claim Marriage Allowance
Save up to £252 per year.
5. Track Side-Hustle Earnings
Many first-time payers get caught out because they don’t track:
- Vinted sales
- Freelance jobs
- Marketplace earnings
Use a simple spreadsheet or an app like Monzo, Emma, or Xero Go.
Case Studies Based on Realistic UK Incomes
Low Income (£10,000/year)
- Below Personal Allowance
- Pays £0 tax
- May still owe National Insurance depending on weekly earnings
Average Salary (£30,000/year)
- Tax-free: £12,570
- Taxable: £17,430
- Tax at 20%: £3,486
- Take-home: approx. £25,800 after tax + NI
Comfortable Salary (£50,000/year)
- Taxable: £37,430
- Income tax: £7,486
- Take-home: ~£37,000
High Earner (£120,000/year)
- Personal Allowance reduced
- Taxable: ~£112,570
- Pays tax at 20%, 40%, and some 45%
This is where tax planning matters most.
A Simple Step-by-Step System to Work Out Your Tax-Free Income
This is a user-friendly, reusable framework:
Step 1: Add all your income
Salary + freelance + rental + side hustles + taxable savings.
Step 2: Subtract allowances
- £12,570 Personal Allowance
- £1,000 Trading Allowance
- £1,000 Property Allowance
- Marriage Allowance (if eligible)
Step 3: Check which band you fall into
Match your remaining income to UK tax rates.
Step 4: Apply the rate only to the amount above the allowance
You don’t pay tax on your entire income.
FAQs
Q1. How much can I earn before paying tax in the UK?
For the 2025/26 tax year, you can earn £12,570 per year before paying Income Tax. This is called your Personal Allowance. You only pay tax on income above £12,570, unless your allowance is reduced (for example, if you earn over £100,000).
Q2. How much can I earn per month before paying tax?
You can earn £1,047.50 per month before paying any Income Tax. HMRC divides your annual Personal Allowance (£12,570) across 12 monthly pay periods, which is why tax starts once your monthly pay exceeds £1,047.50.
Q3. How much can I earn on Vinted before paying tax?
You can earn up to £1,000 per year tax-free under the UK Trading Allowance.
If your Vinted profits go over £1,000, you may need to:
- register for Self Assessment, and
- Pay Income Tax on your profit, not total sales.
Selling your own used items is usually tax-free unless you are trading as a business.
Q4. What is the minimum income to file Self Assessment?
You must file a Self Assessment tax return if you:
- earn over £1,000 from self-employment (after the Trading Allowance)
- receive rental income
- have untaxed income such as dividends, crypto, or side-hustles
- are a higher-rate or additional-rate taxpayer
- have complex finances (e.g., income from abroad)
There is no single “minimum salary”—it depends on your situation.
Q5. Do students have to pay tax?
Yes. Students pay Income Tax the same as anyone else.
If a student earns over £12,570 per year, they will be taxed.
Important notes:
- Student loans don’t reduce taxable income
- Income from part-time jobs, internships, and placements all count
- If tax is deducted incorrectly, students can claim a refund from HMRC
Q6. Does part-time income count toward tax?
Yes. All employment income counts for tax purposes, whether part-time, full-time, or casual. If your total annual income stays under £12,570, you won’t pay Income Tax. If it goes over, tax applies to the amount above the threshold.
Conclusion
For the 2025/26 tax year, the amount you can earn before paying tax in the UK remains £12,570, unchanged due to the government’s tax threshold freeze. Once you understand how the Personal Allowance works—plus what income counts, how allowances apply, and how to reduce your taxable income—you can plan your finances with far more confidence.
Whether you’re employed, self-employed, or earning extra on Vinted, the key is to track everything and check how it fits within the tax-free threshold.
If in doubt, use HMRC’s tax tools or speak to a professional to ensure you stay compliant.
Related: List of Tax Codes and What They Mean HMRC: Complete Guide 2025
