Many students have part-time jobs whilst studying at university. In London there are many part-time job opportunities both on and off campus. This can be a useful source of extra income as well as an opportunity to learn and develop other skills.

However, if you have a job as a student, you may still need to pay Income Tax and National Insurance (NI) if you earn over the income thresholds. 

 

If you work for an employer during your studies any Income Tax and National Insurance contributions will be calculated and deducted from your wages before you receive your payment. This is known as Pay As You Earn (PAYE).  

Key questions:

Click on a question to find out more.
 

How much Income Tax will I pay?

Everybody can earn a certain amount before they start paying Income Tax - this is known as your Personal Allowance.

Key things to know:

  • Personal Allowance is £12,500 for the tax year 2019/20 (or £1,042 a month).
  • Income Tax is charged at 3 different rates over a tax year depending on how much you earn. 
  • The Tax year runs from 6 April to the 5 April, the following year.

In tax year 2019/20:

  • No tax is charged if income is less than £12,500
  • Basic rate of 20% on income from £12,501 - £50,000
  • Higher rate of 40% on income from £50,001 - £150,000
  • Additional 45% on income over £150,000

Important to know: This information is based on the most up-to-date policy and may be subject to change in the new tax-year, which will begin on 6th April 2020.

What happens if my pay varies throughout the year?

It might be difficult to keep track of your income due to income variations. If you have accidentally paid more or did not use your Personal Allowance, you might be able to claim a tax refund by completing this form.

Use the Inland Revenue Tax Checker to work out how much tax you should be paying on your wages.

Important to know: There is no difference between working during term-time or holidays in terms of taxation. If you are working only in the holidays and your estimated earning is less than the Personal Allowance, you will need to complete a tax return claim as above.

What if I work abroad during term holidays?

If you work for a UK employer, you might have to pay UK tax on anything above your Personal Allowance and National Insurance (NI). However, if you work for a foreign employer, you don’t need to pay NI in the UK, but you might have to pay tax contributions in the country you’re working in.

What if I am an Overseas student working in the UK?

There are some double-taxation agreements, which could mean you might not need to pay UK tax on your income if you work while you’re a student. However, if your country does not have this type of agreement, you will have to pay tax as of the above.

How can I find out more?

Our colleagues at Blackbullion have developed a comprehensive online learning module on Taxes which will broader your understanding in just 21mins!

If you have not yet signed up for Blackbullion’s free financial learning tools you can do so with your King’s email address.

You may also find these resources helpful:

Tax Guide for Students

7 basic tax facts every student needs to know

Claim a tax refund if you stop working during the year

Money Saving Expert – Tax Rates | Breakdown what the tax man gets

If you're thinking about money and how to manage it better, check out the Financial Wellbeing video series which you may find very helpful, which includes topics on where your money goes, how to budget and funding studies on health/clinical courses.