Students: Working only in the holidays while being a student

If you're a student on a course in the United Kingdom and you work solely in the holiday periods (summer, Christmas, Easter) for the period up to 5 April 2013 your employer could operate a special procedure (P38S) and pay your wages without Income Tax being deducted.

Changes from 6 April 2013

If you're a student, from 6 April 2013 employers will no longer use the P38(S) process, your employer will operate PAYE (Pay as You Earn) to deduct Income Tax and National Insurance from your wages. Although the P38(S) process has stopped, 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 year without having to pay tax on it. The Personal Allowance for the tax tear 2013-14 is £9,440.

Personal Allowance – find out more

Income Tax rates and thresholds

Starter Checklist

If you start work your employer may give you a Starter Checklist to complete, or ask you relevant information before your first pay day to tell HM Revenue & Customs (HMRC) about you. This will help your employer allocate a tax code and work out the tax on your first pay day. HMRC will process the information you have provided on the Starter Checklist and where necessary, revise the tax code. It's important that you complete the Starter Checklist or provide the relevant information your employer has asked for as soon as possible before your first pay day, so your employer knows what tax code to use. If you don't you could end up paying the wrong amount of tax. You can also complete a print a copy of the Starter Checklist by following the link below. Give it to your employer; do not send the checklist to HMRC.

Starter Checklist - to gather information about new employees (PDF 747K)

Ways you pay Income Tax

National Insurance contributions

If your employed you pay Class 1 National Insurance contributions (NICs). The rates are:

  • if you earn more than £149 a week and up to £797 a week, you pay 12 per cent of the amount you earn between £149 and £797
  • if you earn more than £797 a week, you also pay 2 per cent of all your earnings over £797

National Insurance rates and thresholds