Your personal allowance is an amount that you are allowed to earn before being taxed. The current personal allowance (2022) for most employees is £12,570, meaning they can earn up to this amount of money without paying tax. It’s important to note that even if they earn less than this, they might still be liable for National Insurance payments.
For example, Charlie works as a Finance Manager for a big company and earns £45,000 a year. £12,570, which is his personal allowance, will not be taxed. The remaining £32,430 will be taxed and payments spread over the 12 months of the tax year (April to April) or due at the end of the year if he is self-employed.