Definition, Meaning & Synonyms
personal allowance
noun
/ˈpɜːrsənl əˈlaʊəns/
Definition
A set amount of money that a person can earn before they start paying income tax.
Examples
- In the UK, the personal allowance for the tax year 2023/24 is £12,570.
- Many countries have a personal allowance system that helps reduce the tax burden on low-income earners.
Meaning
The personal allowance is a threshold in taxation that enables individuals to keep a portion of their earnings tax-free, essentially allowing them to earn a specific amount before any tax is deducted.
Synonyms
- tax-free threshold
- tax exemption
- income allowance
