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4110. What is the tax-free allowance amount?

This depends upon the tax code. For example, with a tax code of 1257L, the employee has a tax free pay allowance of 12,570 annually. This means that they do not pay tax on this amount of their earnings, only on their earnings above this amount. However, they do not have to earn this much before they pay tax, as PAYE is calculated cumulatively, and is based on pro rata free pay for each tax period. This way, any tax due is spread as equally as possible over the whole of the tax year. Click here for more information.