Students: paying tax on a part-time job

You may have to pay tax on your part-time job, depending on how much you earn. Nearly everyone in the UK is entitled to an Income Tax Personal Allowance. This is the amount of income you can earn or receive each tax year before paying tax. A new tax year begins every 6 April and finishes on 5 April the next year.

The Personal Allowance for the 2014 to 2015 tax year is £10,000.

If your earnings from your part-time job are below the Personal Allowance, you will not pay tax on them. If your earnings are more than the Personal Allowance you will pay tax on the amount above the allowance.

Your Personal Allowance is divided by the total number of pay days you will have in the tax year. If you are paid:

  • monthly the allowance is divided by 12 (£10,000 divided by 12 months = £833 a month)
  • weekly the allowance is divided by 52 (£10,000 divided by 52 weeks = £192 a week)

If you are paid monthly your employer will not deduct tax from the first £833 you earn each month. If you are paid weekly your employer will not deduct tax from the first £192 you earn each week.

HM Revenue & Customs (HMRC) charge different rates of Income Tax depending on how much you earn. The rates for 2014 to 2015 are:

  • 20% on earnings from £1 to £31,865
  • 40% on earnings from £31,865 to £150,000
  • 45% on earnings above £150,000

If you have paid tax and your total taxable income for the year doesn't go above your Personal Allowance, you can claim a refund. You can do this during the tax year if your income is likely to remain below your Personal Allowance.

If you think you have paid too much tax you should complete a P50 Claiming tax back when you have stopped working form (Opens new window).

More useful links:

Ways you pay Income Tax

Tax refunds and reclaiming overpaid tax

Personal Allowance

Income Tax rates and allowances

National Insurance Contributions rates and allowances