Savanna Hoffman
Students on placement years may have to pay taxes such as Income Tax and National Insurance, depending on their income. However, placement students are typically considered full-time students and are therefore exempt from paying Council Tax. International students on placement in the UK are also required to pay taxes on their earnings, but they may not receive funding from the university. Students should be cautious about financial scams and avoid paying upfront fees for placement opportunities. Additionally, they should keep all pay-related documents to claim any tax refunds after their placement.
| Characteristics | Values |
|---|---|
| Placement students paying income tax | Placement students are subject to income tax once their earnings exceed the personal allowance. This includes international students. |
| Placement students paying National Insurance | Placement students earning above a certain threshold are liable for National Insurance contributions. |
| Placement students and Council Tax | Placement students registered as full-time students are generally exempt from Council Tax. However, private landlords may not accept exemption forms and charge Council Tax regardless. |
| Double taxation agreements | Some countries have agreements with the UK that exempt students from paying UK tax on their income while studying. |
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What You'll Learn
Placement students and income tax
Students on placement in the UK may have to pay income tax and National Insurance, depending on their income and personal circumstances. Placement students are generally considered full-time students and are therefore exempt from paying Council Tax. However, they may have to pay income tax and National Insurance if their earnings exceed the personal allowance or threshold.
For the tax year 2024/25, the personal allowance for National Insurance is £242 per week, meaning placement students will have to pay 10% of any amount they earn above this. As for income tax, the earnings allowance for all UK residents is £12,570 for the tax year 2025/26. Any income above this threshold will be taxed at a rate of 20%. It is important to note that placement earnings are not limited to salary but also include interest from savings and income from other employment, such as part-time jobs.
International students on placement in the UK are subject to the same income tax and National Insurance rules as other residents. They may also face additional considerations, such as applying for a National Insurance number and ensuring they have the necessary visas or permits to work in the UK. While there is no specific funding available for international students during their placement year, they can apply for emergency funding through the Susan Cadbury Fund if they encounter unexpected financial difficulties.
Home and EU students with full or pre-settled status may have access to different types of funding and support during their placement year. They can apply for maintenance loans, tuition fee loans, or placement scholarships, depending on the type of placement they are undertaking. It is recommended that students seek advice from a Student Adviser or their university to understand their specific circumstances and explore available funding options.
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Placement students and National Insurance
If you are a student in the UK with a job, you may need to pay income tax and National Insurance. For the 2024/25 tax year, you only need to pay National Insurance if you earn more than £242 per week, and you will have to pay 10% of any amount exceeding this.
International students are required to pay National Insurance contributions if they work in the UK. If you are an international student, you may already have a National Insurance number from previous work or study in the UK. If you do not have a National Insurance number, you must apply for one online once you are in the UK. You must have the right to work or study in the UK to obtain a National Insurance number.
If you are on a UK-based paid placement, you will have to pay income tax and National Insurance on earnings that are over your personal allowance. This includes international students. You can get forms and information about getting a tax refund from HMRC. If you are an international student, you should do this before leaving the UK.
If you are a home or EU student with full or pre-settled status, you may be able to receive maintenance loans through Student Finance England for your placement year. Unpaid placements qualify for a reduced level of maintenance loan.
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Council tax exemption for placement students
Students on placement years often wonder whether they are required to pay council tax. The answer is that placement students are generally exempt from council tax, but only if the placement is part of their course, such as a sandwich course. This is because they are considered full-time students for council tax purposes.
To be considered a full-time student, a course must last at least one calendar or academic year and involve at least 21 hours of study, tuition, or work experience per week during term time. Placement students must provide proof of their student status to their local council, typically in the form of a student certificate or letter from their university.
It is important to note that tax rules can vary depending on the council and university, so placement students should contact their local council to confirm their specific requirements. Additionally, placement students who earn an income above their personal allowance will be required to pay income tax and National Insurance. International students on placement in the UK are also subject to these tax obligations.
In summary, while placement students are generally exempt from council tax, they must ensure they meet the criteria of a full-time student and provide the necessary documentation to their local council. They should also be aware of their income tax and National Insurance obligations, particularly if they are earning above a certain threshold.
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Funding and scholarships for placement students
There are many funding options available for placement students, including scholarships, grants, and bursaries. These can be offered by the university itself, external organisations, or governments. Here are some key points to consider when looking for funding and scholarships as a placement student:
- University Funding: Your university's study abroad department is a great first point of contact to learn about funding opportunities specifically for placement students. This includes scholarships, grants, and bursaries donated by alumni, employers, or organisations. The availability and amount of funding can vary depending on the university, so it's important to inquire directly with your institution.
- External Scholarships and Grants: In addition to university-offered funding, there are often external scholarships and grants available for placement students. These may be offered by governments or other organisations. For example, the UK government launched the Turing Scheme in 2021, which provides grants for students from less advantaged backgrounds to study and work abroad. There are also specific scholarships for UK students wishing to study in certain countries, so researching opportunities in your intended destination is crucial.
- Eligibility Criteria: It's important to carefully review the eligibility criteria for any scholarship or grant you're interested in applying for. Factors such as nationality, residence, fee status, course or subject, and whether the placement is compulsory or optional can all play a role in determining your eligibility.
- Postgraduate Scholarships: If you are a postgraduate student, there are often more funding opportunities available, including scholarships, bursaries, and additional financial support offered by the UK government and other organisations. The UK Council for International Student Affairs (UKCISA) is a valuable resource for learning more about funding and eligibility for postgraduate students.
- Undergraduate Scholarships: While less common, there are still undergraduate scholarships and bursaries available for EU and international students studying in the UK. These can be offered by UK universities themselves or by third parties, such as governments or organisations in the student's home country. Again, the UKCISA website is a good place to start your search for undergraduate funding opportunities.
- Travel Grants: If you are studying or completing a placement abroad, travel grants may be available to help fund your experience. These are often provided by universities or external organisations to encourage and support international education and cultural exchange.
- Income Tax and National Insurance: If you are working during your placement year, you may need to pay income tax and National Insurance. Your employer will typically deduct these through Pay As You Earn (PAYE). However, if you are self-employed or a contractor, you may need to manually declare your taxes. If you have paid too much tax, you may be able to claim a refund by using HMRC's tax checker or contacting them directly.
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Paid placements and means-tested benefits
In the UK, students on placement are regarded as full-time students and are thus exempt from paying Council Tax. However, a paid placement will impact any means-tested benefits that the student is receiving. This will also affect the benefit entitlements of their family if they are living with them during their placement year.
From July 2025, eligible students in Australia will be able to access $319.50 per week while they are on placement. This Commonwealth Prac Payment will be means-tested to target students who need it the most. The payment will be administered by the Government through eligible higher education providers for higher education students and through the Department of Employment and Workplace Relations (DEWR) for VET students.
In the UK, students on placement are required to pay income tax and National Insurance on their earnings above their personal allowance. This includes international students. The earnings allowance for income tax for all UK residents is £12,570 in the tax year from 6 April 2025 to 5 April 2026. Any amount above this will be taxed at a rate of 20%. Students are advised to keep all pay-related documents, as they may need them to claim tax refunds after their placement.
Students at Aston University can apply for a tuition fee loan from Student Finance England or Student Finance Services to cover their fees during their placement year, provided they are Home or EU students with full or pre-settled status. They may also qualify for a placement scholarship or a reduced level of maintenance loan for unpaid placements.
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Frequently asked questions
Yes, if you are on a UK-based paid placement, you will have to pay income tax on earnings that are over your personal allowance. This includes international students. The earnings allowance for the tax year 6th April 2025 to 5th April 2026 is £12,570.
Yes, you will have to pay National Insurance if you earn more than £242 a week in the tax year 2024/25. You will be taxed 10% on any amount that exceeds this.
If you are a full-time student, you should be exempt from Council Tax. Placement students are still registered on a full-time course, so they should be exempt. You may need to show your Local Council a student status letter, which you can obtain from your university.
If you've paid tax and stop working partway through the tax year, you may be able to claim a refund. You can use HMRC's tax checker to find out if you've paid too much tax or contact HMRC directly.
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