Current Size: 100%
Do working students have to pay tax?
However, the good news is that you are entitled to earn a certain amount before you start paying tax – this is called your Personal Allowance. You can get information on the current allowances on the GOV.UK website.
For the 2017/18 tax year, those born after 5 April 1948 are entitled to earn up to £11,500 per year before they start paying income tax. So if you've got a part-time job and earn under £11,500, you won't pay a penny.
Above your Personal Allowance, the amount you pay depends on the amount you earn. In 2017/18: the first £11,500 is tax-free; you pay 20% tax on earnings between £11,501 and £45,000. Few students are likely to be earning over £45,000, but if you do, you pay 40% on this.
Most employers deduct tax from your wages through PAYE ('Pay As You Earn'), and this is averaged out over the year. This means that although you may have a short-term job, you pay tax on your income as though your job was year-round and then you're entitled to a refund at the end of the tax year.
You'll also pay income tax on income such as savings interest or Jobseeker's Allowance (JSA).
National Insurance (NI) is a contribution to state benefits, and is payable on all income over £157 per week. Between £157 and £866 per week, you pay 12% of your income in NI contributions. Any earnings above £866 per week are charged at 2%.
The student Job Shops' organisation NASES produces helpful information on students and tax.