A tax personal allowance, also commonly referred to simply as a personal allowance, is an amount of income that an individual can earn each year without having to pay income tax on it. It represents the threshold below which no income tax is levied. Personal allowances vary by country and can also depend on the individual's circumstances, such as their age, income level, and marital status.
In the United Kingdom, for example, there is a tax personal allowance that is set annually by the government. For the tax year 2023-2024, the personal allowance in the UK is £12,570. This means that individuals could earn up to £12,570 in income during that tax year without having to pay any income tax on it.
It's important to note that personal allowances may be subject to certain conditions or restrictions, and they can change from one tax year to another based on government policies and economic factors. Additionally, individuals with income above a certain threshold may see their personal allowance reduced or eliminated altogether.