You Now Pay Income Tax on a 20-Hour Week

If you work part-time on the minimum wage, there is a good chance you started paying income tax this year without anyone telling you it was coming.

The reason is arithmetic. The National Living Wage went up to £12.71 an hour in April 2026. The tax-free personal allowance stayed where it has been since 2021, at £12,570.

The 20-hour point

Work 20 hours a week, 50 weeks a year, at £12.71 an hour and you earn £12,710.

That is £140 above the personal allowance. So you are a taxpayer.

The Low Incomes Tax Reform Group made exactly this point when the freeze was extended: from April 2026, someone on the minimum wage starts paying income tax after working around 20 hours a week.

Not full-time. Not overtime. Twenty hours.

Why this has happened

Two policies moving in opposite directions.

The minimum wage has risen substantially — from £8.91 in 2021 to £12.71 now. That is deliberate, and for most people it is a good thing.

The personal allowance has not moved at all in that time. It was frozen at £12,570 in April 2021 and, following the Autumn Budget in November 2025, stays frozen until April 2031.

When one line rises and the other stays flat, they eventually cross. For minimum wage workers on part-time hours, that crossing point has now been reached.

What it actually costs you

Income tax is charged only on the amount above the allowance, at 20% for basic rate taxpayers. So on £12,710 of earnings you pay tax on £140 — about £28 across the year.

That is not a disaster on its own. The point is the direction of travel. Every hourly rate rise from here, and every extra hour worked, now has 20% taken off the part above £12,570 where previously it did not.

National Insurance is separate and has its own threshold, also frozen at £12,570 until 2031.

Who this hits

People working reduced hours for reasons that are rarely a free choice:

• Parents working around school hours or childcare costs
• Carers fitting work around someone they look after
• People with health conditions or disabilities who cannot manage full-time hours
• Students and young workers
• People on zero hours contracts whose hours vary week to week

It is a group that generally has the least slack in its budget and the least likely to have anyone checking their tax position for them.

Things worth checking

Your tax code. If you have more than one job, or your hours changed during the year, or you started or left a job mid-year, your code can easily be wrong. Emergency codes in particular often take too much. Check it against your payslip and challenge it if it looks wrong — HMRC will refund overpaid tax.

Whether you have overpaid. If you only worked part of the year, you may have paid tax on earnings that, annualised, came to less than £12,570. That is reclaimable, and you can go back four tax years.

Marriage Allowance. If you earn under £12,570 and your partner is a basic rate taxpayer, you can transfer part of your allowance to them. It is worth a few hundred pounds a year and large numbers of eligible couples never claim it.

Your benefit position. Starting to pay income tax does not directly change Universal Credit, which works off net earnings, but a change in hours or pay can affect your award. If your hours have changed, it is worth rechecking what you are entitled to.

What will not change it

Nothing about your own circumstances puts the threshold back. It is frozen until April 2031 on current law, and it has already been extended twice.

What you can do is make sure you are not paying more than the rules require — right tax code, right allowances claimed, overpayments reclaimed. On a low income those are the things that actually make a difference to what lands in your account.

General rights guidance, not legal advice. Figures verified against GOV.UK, HMRC and Low Incomes Tax Reform Group sources, September 2026.