Understanding the Marriage Allowance and PAYE

The Marriage Allowance is a tax break that allows couples to transfer 10% of their personal allowance to the other partner. This means that one partner can transfer up to £1,250 of their personal allowance to the other partner. The Marriage Allowance is only available for people who are married or in a civil partnership, and both partners must be earning under £50,000 per year. Understanding how PAYE works with the Marriage Allowance can be complicated, so let’s take a look at what you need to know.

How PAYE Works with the Marriage Allowance

The first thing you should know about PAYE and the Marriage Allowance is that it applies only if both partners are employed. In this case, each partner pays tax through PAYE (Pay As You Earn). The partner who receives the transferred allowance will pay less tax on their income, while the partner who transfers part of their allowance will continue to pay normal rates of tax.

It’s important to note that if one person earns more than £50,000 per year, then they won’t be eligible for the Marriage Allowance. If both partners earn more than £50,000 per year and neither has an adjusted net income of less than £12,500, then they won’t be able to claim the allowance either. In addition, if one person earns over £125,000 per year then they won’t be eligible either. The amount of money you save through this method depends on how much your combined annual income is and what your respective tax bands are.

In order to apply for the Marriage Allowance you must register online via HMRC’s website and provide information about both partners’ earnings as well as details about your marriage or civil partnership agreement. After registering online you’ll receive a confirmation email from HMRC confirming your application has been successful. Once approved, HMRC will adjust your payments accordingly so that you receive any savings due to you as soon as possible after registering for the scheme.


The Marriage Allowance can offer significant savings for couples who qualify for it but understanding how PAYE works with it can be tricky. This article provides a brief overview of what you need to know about PAYE and how it affects the Marriage Allowance but we encourage everyone interested in taking advantage of this scheme to do further research before applying or making any changes to their current arrangements with HMRC. Ultimately though this scheme presents great savings potential for many couples across England and Wales so if you think it could benefit you then make sure you explore all available options!

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