What are National Insurance and income tax?

Every worker in the UK has a National Insurance (NI) number, which you need in order to work legally. It is used to keep track of social security contributions. If you earn more than about £155 a week, both you and your employer have to pay what are called National Insurance contributions (NICs). These are a kind of tax. In return, workers gain entitlements to various social security benefits. Paying NICs in the UK can also help you build up entitlements in your home country.

To get a NI number, you need to make an appointment for an 'evidence of identity' interview at your nearest Job Centre. This is a government office that can be found in most large towns or city districts. You will need to take proof of your identity (such as a passport) as well as evidence that you are working. You may be given a temporary NI number until the proper number is issued. Visit the GOV.UK website for more information about National Insurance.

You will also have to pay income tax. The amount of tax you have to pay depends on a number of different factors. Every worker in the UK has a tax code, which an employer uses to work out how much tax they should pay on your behalf. If you are starting your first job in the UK, you will probably start to pay 'emergency tax' until you have been given a tax code.

Every worker has a 'personal allowance' threshold. This is the amount of income each year you don't have to pay income tax on. The standard personal allowance for the tax year from April 2017 to April 2018 is £11,500. The personal allowance is reviewed every year.

Some employers may offer you a job without paying National Insurance or tax (known as 'cash in hand'). This is against the law. If they are breaking this law, it is very likely they will break other employment laws as well, especially those that protect workers. It may be harder for you to enforce any of your legal rights if you are not working legally. You should avoid this type of job.

Note that your employer has no right to hold on to your passport or identity documents, but they must ask to see original identity documents proving that you have the legal right to work in the UK before you are allowed to start work. They will take a photocopy of your identity documents.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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