Students: Paying tax and National Insurance contributions. I am a student about to leave school

The total of your tax allowances is the amount of money you can receive each year free of tax. Most people just receive one tax allowance: the Personal Allowance (£6,035 in 2008/2009), but there are others if, for example, you are over 65 or blind.

We don't tell your employer what tax allowances you have as this is confidential information about your personal circumstances. Instead we give your employer a personal 'tax code' which, in conjunction with tax tables we give them, allows them to deduct the right amount of tax (if any) from your pay each week or month.

When you get your first job we also let you know:

• what tax allowances you are entitled to
• what your tax code is

How your tax code is calculated
Your tax code is:

the total of your tax allowances
without the last figure, and
followed by a letter

For example if your only tax allowance in the tax year 2008/2009 is your Personal Allowance your tax code will be calculated as follows:

• Personal Allowance for 2008/2009 is £6,035
• without the last figure (5) this becomes 603
• the letter we use for people with just the basic Personal Allowance is L
• your tax code will therefore be 603L