Do Students Pay Tax in the UK?

Students in the UK pay tax if their income exceeds £12,570. Learn how PAYE works, tax rules for part-time jobs, and National Insurance contributions.

Many students take on part-time jobs, freelance work, or summer employment to help cover living costs. While students have the same tax responsibilities as other workers, most do not earn enough to pay tax. However, if their income exceeds a certain threshold, they will need to contribute to Income Tax and National Insurance (NI).

This guide explains whether students pay tax, how PAYE works, and when students need to pay National Insurance.

Do Students Have to Pay Tax in the UK?

Students must pay tax if their total income exceeds the Personal Allowance, which is £12,570 for the 2024/25 tax year. If a student earns below this amount in a tax year, they will not pay Income Tax.

Tax applies to all income sources, including:

  • Part-time jobs

  • Freelance work or self-employment

  • Internships and placements (if paid)

  • Savings interest over the tax-free limit

Some income, like student loans, grants, and scholarships, is not taxable.

How Does PAYE Work for Students?

Most working students are employed under PAYE (Pay As You Earn), where tax is deducted automatically from wages.

  • If a student earns under £12,570 per year, they will not pay tax.

  • If they earn more, Income Tax is deducted at 20% on earnings over £12,570.

  • Employers also deduct National Insurance (NI) if the student earns more than £242 per week.

Tax and National Insurance If You're Employed

Students must pay National Insurance if they earn above £242 per week (£1,048 per month).

  • Earnings up to £242 per week – No NI is deducted.

  • Earnings over £242 per week – 8% NI is deducted.

Unlike Income Tax, National Insurance does not reset annually. It is charged on a weekly or monthly basis, depending on how often wages are paid.

Who Needs to Pay Tax?

A student will need to pay tax and National Insurance if:

  • Their income exceeds £12,570 per tax year.

  • They earn over £242 per week from a job.

  • They work full-time or multiple part-time jobs that push their earnings over the threshold.

If a student only works part-time or during holidays, they may not earn enough to pay tax but could still have deductions applied.

Can Students Claim a Tax Refund?

If a student is taxed incorrectly, they may be able to claim a refund. This happens when:

  • They stop working before earning £12,570 in a tax year.

  • They are on the wrong tax code.

  • They only work part-time or seasonally, but their employer applies full tax deductions.

To claim a refund, students can use HMRC’s online tax refund service or fill out a P50 or P800 form.

Final Thoughts

Students in the UK only pay tax if they earn above £12,570 in a tax year. Most part-time workers will not exceed this threshold, but those with multiple jobs or full-time work may need to pay tax and National Insurance. If a student overpays tax, they can claim a refund from HMRC.

To check tax deductions, students should regularly review their payslips and tax codes to ensure they are on the correct tax rate.