Lana Oconnell
Students with jobs are often subject to the same rules as other workers when it comes to paying income tax and National Insurance. In the UK, this means that students must pay income tax and National Insurance if they earn over a certain amount. This also applies to international students working in the UK, as well as UK students working abroad during their holidays. National Insurance is typically deducted from pay if earnings exceed £242 per week, while income tax is levied on income above a tax-free personal allowance, which changes each tax year. Students can apply for a National Insurance Number and check their tax codes to ensure they are paying the correct amount.
| Characteristics | Values |
|---|---|
| Are students required to pay tax and national insurance? | Students are required to pay income tax and national insurance if they earn over a certain amount. |
| Who is responsible for deducting the payments? | Employers are responsible for deducting the payments from the student's wages. |
| What if the student has paid too much tax? | Students can use HMRC's tax checker to find out if they have paid too much tax and can claim a refund. |
| What if the student has multiple jobs? | Students with multiple jobs need to notify HMRC to ensure they have the correct tax code and are not overpaying tax. |
| Do international students pay tax and national insurance? | International students are required to pay tax and national insurance on their earnings. They need to apply for a National Insurance Number once they arrive in the UK. |
| Can students opt-out of paying national insurance? | No, all employees must pay national insurance on their earnings above a threshold level. |
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What You'll Learn
Working while studying
Students who work alongside their studies will need to pay income tax and National Insurance on their earnings, in the same way as any other employee. National Insurance is mandatory for anyone earning over £242 per week, and typically amounts to around 12% of your income. Income tax is only paid on earnings over a certain threshold, which changes each tax year.
If you are working in the UK, you will need to apply for a National Insurance Number (NINO) to ensure your contributions are correctly recorded. You can apply for a NINO once you are in the UK, and you must have the right to work or study there. You can start working before receiving your NINO, but you must inform your employer that you have applied for one and provide it to them when you receive it.
If you are an international student, you will also need to prove your identity and right to work in the UK. You may be invited to an interview to discuss your circumstances and the need for a NINO.
Juggling a job and your studies can be challenging, but with the right approach, it is possible to balance the two. Here are some tips to help you manage:
- Craft a study plan that fits with your work commitments, using online learning for flexibility.
- Set up a quiet, dedicated study space away from distractions, and use apps to stay organised and block time-wasting websites.
- Prioritise tasks and set achievable goals, using the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound).
- Regularly review and adjust your goals and study plan based on your progress and any changes in your work or personal life.
- Avoid burnout by practising regular self-care and seeking support from your network.
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National Insurance number
Students in the UK are not exempt from paying income tax and national insurance. If you are a student and have a job, you may need to pay income tax and national insurance on your wages. Your employer will ask for your National Insurance number to process your wages and make the necessary deductions.
The National Insurance number is used in the UK for the administration of the National Insurance or social security system. It is also used as a de facto national identification number in the UK, including in the tax system, banking, social welfare, online government services, and electoral registration. The number is made up of 2 letters, 6 numbers, and a final letter, for example, QQ123456B. It is unique without the suffix letter.
You can obtain your National Insurance number by signing in to your personal tax account or HMRC app to download a letter that shows your National Insurance number. You will need to prove your identity to view your National Insurance number online, for example, by using a passport or driving licence. If you do not have the required documents, you may need to attend an appointment in person to prove your identity. If you cannot find your National Insurance number online, you can contact HMRC to request a letter confirming your National Insurance number. This can take up to 10 working days to arrive if you live in the UK or 21 working days if you live abroad.
If you are an international student, you will need to apply for a National Insurance number once you arrive in the UK. You can start working before receiving your National Insurance number if you can prove your right to work in the UK. You should inform your employer that you have applied for a National Insurance number and provide it to them once you receive it.
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Income tax
Students with jobs are required to pay income tax and National Insurance on their earnings, just like any other employee. Income tax is a tax you pay on your income, and it is usually deducted directly from your wages through Pay As You Earn (PAYE). The amount of income tax you pay depends on how much you earn, and most people have a personal allowance of tax-free income. This standard tax-free allowance changes every tax year (6 April to 5 April the following year).
If you are a full-time student with a holiday job, you may not need to pay tax through PAYE, but you will still need to pay National Insurance if you earn more than the weekly threshold. You can ask your employer for a form P38(S) if you are a full-time student, only working during the holidays, returning to full-time education after the holidays, and your total income for the year is below the personal allowance.
If you work for yourself, you are responsible for sorting out your own tax and National Insurance payments. It is important to ensure that you are paying the correct amount of tax and National Insurance, and you can use the HMRC tax checker to see if you are paying too much or too little. You can notify HMRC of your income through your Personal Tax Account on the gov.uk website or by calling them directly.
As a student, you may be entitled to reclaim any tax you have paid when you leave your job by filling in a form P85 and sending it to your Tax Office. You can also apply for a refund from your Tax Office at the end of the tax year (March) if you believe you have overpaid your taxes.
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Tax refunds
Students in the UK are required to pay income tax and National Insurance on their earnings above a certain threshold. If you are working while studying, your employer will deduct these contributions from your salary before you are paid. However, many students are unaware that they could be eligible for a tax refund if they have overpaid their taxes.
To ensure you are not paying too much tax, it is important to check your tax code and notify HMRC if you have multiple jobs or change your job. You can do this through your Personal Tax Account on the gov.uk website or by contacting HMRC directly. By taking these steps, you can avoid potential overpayments and make it easier to claim any overpaid taxes back.
As a student, you may be working part-time or during holiday jobs, and your income may fall below the personal allowance threshold for tax-free income. In such cases, you may have paid more tax than you needed to, and you could be eligible for a refund. Claiming back overpaid taxes can provide a significant financial boost, and it is worth checking if you are owed any money.
To claim a tax refund, you will need to gather relevant documents, such as P60s from your employers, which show your income and taxes paid. You may also need to provide evidence of your student status and any changes in your employment circumstances. It is recommended to familiarise yourself with the process and requirements to ensure a smooth and successful refund claim.
International students should be aware that the process for tax refunds may differ. While they are also required to pay taxes and National Insurance contributions while working in the UK, there could be additional considerations, such as visa status and the duration of their stay. Seeking advice from the relevant authorities for obtaining a National Insurance Number or student support services is essential to understand your specific situation and options for claiming tax refunds.
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Tax-free income
Students in the UK are not exempt from paying income tax and national insurance. However, there is a tax-free allowance, which is the amount of income that can be earned before paying tax. This standard tax-free allowance, also known as a personal allowance, changes every tax year (6 April to 5 April the following year). For the 2022-23 tax year, you will not pay income tax on the first £12,570 you earn. After that, you will pay 20% income tax on monthly earnings between £1,048.01 and £4,189, 40% income tax on monthly earnings between £4,189.01 and £12,500, and 45% income tax on monthly earnings over £12,500.
National Insurance is also mandatory on earnings above a certain amount. You will not pay National Insurance on the first £1,048 you earn per month, which is £9,564 per year. For monthly earnings between £1,048.01 and £4,189, you will pay 12% National Insurance, and 2% National Insurance for monthly earnings over £4,189.
If you are a foreign student, you usually do not pay UK tax on foreign income or gains, as long as they are used for course fees or living costs. However, HM Revenue and Customs (HMRC) may ask you to account for your living costs if they exceed £15,000 in a tax year (excluding course fees). Some countries have a ''double-taxation agreement', meaning you do not pay UK tax on your income if you work while studying. If your country does not have such an agreement, you must pay tax like others who come to live in the UK.
To work in the UK, you need to obtain a National Insurance Number (NINO) to ensure your tax and National Insurance contributions are correctly recorded. You can apply for a NINO once you are in the UK and have the right to work or study. You can start working before receiving your NINO if you can prove your right to work in the UK, and you must inform your employer that you have applied for one.
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