Do working students have to pay tax?
Well, the bad news is that whilst students dont pay tax on grants or student loans, they are still liable for income tax and National Insurance in the same way as other workers. 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 HM Revenue and Customs website. For the 2009/2010 tax year, you are entitled to earn up to 6,475 a year before you start paying income tax. So if youve got a part-time job, and earn under 6,475, you wont pay a penny. Above your personal allowance, the amount you pay depends on the amount you earn. In 2009/2010: • on your earnings between 6,475 and 34,800 you pay 20% • we doubt many students earn over 34,801, but if you do, you pay 40% on this. Most employers deduct tax from your wages (called PAYE, or Pay As You Earn), and this is averaged out over the year. This means that although you may have a short term job, y
