Employment, Tax and National Insurance
Most students are not in any special position in regards to
income tax or national insurance contributions. However, student
loans, grants, most other educational grants and scholarships, and
awards from the Access to Learning Fund are not taken into account
as income. Everyone has a personal allowance, up to which no tax is
payable, and above that a percentage amount is payable depending on
how much is earned.
Income Tax - Rates and Allowances
Income Tax is charged on assessable income
(income from all sources not subject to tax exemption) received
during a financial year.
The personal allowance for April 13 - April 14 is
There may also be other tax allowances you may
claim, depending on your circumstances. If you earn below this
annual figure then you will not have to pay tax.
What is National Insurance?
National Insurance is a government scheme
where contributions paid by those in employment provide benefits
for those who cannot work because they are sick, unemployed or
retired. It is paid by employers and employees.
As a student you are not required to pay NICs
on any forms of student support. However, if you are employed and
your income exceeds the earning threshold of £149 per week you must
pay Class 1 (earnings-related) contributions.
Everyone who works in the UK including home,
European Economic Area and International students is liable to pay
National Insurance. The amount that you pay will depend on how much
you earn. Your employer will deduct your National Insurance
contributions from your pay if you are:
- Employed in the UK, are over the age of 16 but under the age of
65 years old and;
- Earn the same or more than the 'primary threshold'.
The law requires the employer to deduct the
employee's National Insurance contributions from their pay. If you
are planning to work you will still need a National Insurance
Number even if you do not earn £149.00 a week.
Your National Insurance Number
Your National Insurance Number is a unique
reference number, which enables the Inland Revenue to store
information about your income. The Inland Revenue can record
information about how much National Insurance you have paid and how
this affects any sickness or unemployment benefits you may be
If you are a UK student you should have
automatically been given a National Insurance Number when you
reached the age of 16. If you have lost your Number you need to
visit your nearest Benefits Agency and take two proof of address
documents with you. The proof of address can be a utility bill,
bank statement or tenancy agreement.
If you are an International, EEA or a UK
student and you do not have a National Insurance Number you should
apply for one as soon as you start work. You should contact your
nearest Benefits Agency, who will invite you for an interview. You
will need evidence of:
- Your identity such as a passport and/or birth
- Your employment or proof of your job offer in
writing. If you have already started work you will need to provide
your contract and wage slips or a letter from your current employer
confirming the details of your job.
- Your current address. You will need to provide
a copy of your tenancy agreement, a utility bill and a bank
- Your student status such as your student
enrolment card or a valid NUS Card.
The process of applying for an interview,
being given an interview date and then receiving a National
Insurance Number can take several months. During this time your
employer can issue you with a temporary National Insurance Number.
It is important however that if you are using a temporary number
you must be in the process of obtaining a permanent number by
applying for an appointment with the Benefits Agency.
You can use form CA5404 to show your employer
that you have applied for a Number if you have never had one
A National Insurance Number does not give you
permission to work. If you are an international student then you
must check that the stamp in your passport gives you permission to
work. If you require further advice regarding this please contact
the visa compliance officer via e-mail at: email@example.com
Creating a Temporary National Insurance Number
Your employer can create a Temporary National
Insurance Number for National insurance and Income Tax purposes by
taking 'TN' as the first two letters (this will tell the Inland
Revenue that this is a temporary number, then writing your date of
birth in 6 numbers, then writing M (for male) or F (for female).
Please remember this is only a temporary number and you will still
need to complete your application to the Benefits Agency for a
Benefits Agency details:
York YO1 7FB
York YO31 7JZ
Deciding whether to pay Class 3 (voluntary) contributions
Before committing yourself to expensive
voluntary contributions, you should consult your local NICs office
or contact the Retirement Pension Forecasting Scheme on 0845 3000
168 to get an indication of your likely pension at retirement age
and if it is necessary for you to make voluntary contributions.
This is particularly relevant for postgraduates, mature students,
if you have taken time out of work for caring responsibilities, or
if you have lived abroad for long periods of time. Most younger
students will not need to make voluntary payments as you will have
sufficient time to qualify for full pension rights on completion of
HM Revenue & Customs
The HMRC website has a special section for students
Problems with your employer
Many students have part time work to supplement their income
whilst studying. If you encounter any problems with your
employer, such as as deduction from your wage, then you may be able
to take action to recover any losses you have suffered. It
can be a complex area of law and you should always seek advice
before proceeding with action as there is a fee associated with
taking action at a tribunal.
You should seek advice as soon as possible as there are strict
time limits that apply for many tribunal claims and if you miss the
time limit it can mean you are prevented from taking any claim.
You can speak to the funding advice team for further advice,
alternatively you can find out more information by looking at the