Casual, part-time, temporary workers - tax and National Insurance

If you work part-time or on a casual or temporary basis you usually pay Income Tax and National Insurance contributions if you earn more than a certain amount each year. This applies whether you are employed or self-employed.

On this page:

If you work for an employer

If you're employed on a casual, temporary or part-time basis, by law your employer must:

  • deduct tax and National Insurance contributions from your wages
  • give you payslips
  • deduct student loan repayments, if relevant
  • give you form P45 when you leave
  • give you form P60 at the end of each tax year if you still work for the employer

What about cash in hand?

It's illegal for your employer to pay you cash in hand without deducting tax and National Insurance contributions from your wages.

If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:

  • maternity or paternity leave
  • sick pay
  • Jobseeker's Allowance

In addition you could end up having to pay the tax and National Insurance contributions yourself.

If you suspect your employer of not paying tax or National Insurance contributions on your wages you can report them in confidence using the Tax Evasion Hotlineby following the link below.

Tax Evasion Hotline

Tax and National Insurance for the employed

PAYE forms: P45, P46 (Starter Checklist), P60, P11D

Find out more about how to report tax fraud

If you work for more than one employer

If you work for more than one employer, you'll get a special tax code to take this into account.

Your tax allowances - amounts that you can get to reduce your tax bill - will normally be given against the pay from your main job. Your other job(s) will be taxed at the basic, higher or additional rate, depending on your total income.

Tax and National Insurance for the employed

If you have more than one tax code

Employment rights

All employees have rights, whether they are full or part-time, casual or temporary, including:

  • holiday pay
  • National Minimum Wage
  • protection from discrimination

If you're concerned about your rights, you can ask a union for help or get free advice from your local Citizens Advice Bureau.

Check the facts about employment rights and find a union on the Trade Unions Congress workSMART website (Opens new window)

Find your nearest Citizens Advice Bureau on the Citizens Advice Bureau website (Opens new window)

If you're a pensioner

If you're a pensioner, that is, you are State Pension age or older, you don't need to pay National Insurance contributions on any earnings you receive but you may still need to pay Income Tax - follow the links below to find out more.

Do you have to pay tax in retirement?

Making sure you've stopped paying National Insurance

If you're a student

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 who lives 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 year 2014 to 2015 is £10,000.

Personal Allowance - find out more

Reclaiming tax if you've overpaid through your job

Ways you pay Income Tax

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If you work for yourself

If you're self-employed on a temporary or part-time basis you must register for business taxes and National Insurance with HM Revenue & Customs (HMRC) as soon as you start work. You'll have to complete a Self Assessment tax return and are responsible for paying your own tax and National Insurance contributions on the income you earn. Even if you don't think you'll earn enough to need to pay tax, you still need to complete a tax return.

Tax and National Insurance for the self-employed

Register for business taxes with HMRC

Registering for Self Assessment and getting a tax return

Working for cash

You can accept cash payments for work you do, but it's illegal for you not to declare this on a tax return, and you must pay Income Tax and National Insurance contributions if these are due. This will depend on your overall taxable income in the tax year.

Tax and National Insurance for the self-employed

Checking your employment status

It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and National Insurance contributions. Read more in HMRC related article.

Work out if you're employed or self-employed

If you're a pensioner

You stop paying Class 2 National Insurance contributions as soon as you reach State Pension age and Class 4 contributions from the start of the tax year after the one in which you reach State Pension age. But you may still need to pay Income Tax.

Making sure you've stopped paying National Insurance

Do you have to pay tax in retirement?

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Does how much you earn affect the tax you pay?

Everyone gets a personal tax-free allowance (basic Personal Allowance is £10,000 in 2014 to 2015). You do not pay tax on anything you earn below this amount.

The National Insurance you pay depends on your earnings or profits and whether you've reached State Pension age. If you're an employee, you do not pay any if you earn less than £153 a week (for the 2014 to 2015 tax year). If you're self-employed, you may not have to pay Class 2 National Insurance contributions if you qualify for a Small Earnings Exception where your profits for the year are expected to be less than £5,885 for 2014 to 2015. Class 4 National Insurance contributions will only be due if your profits exceed £7,956 in 2014 to 2015. If you're a pensioner, you don't have to pay National Insurance contributions.

Personal Allowance

National Insurance - the basics

National Insurance contributions Class 2

National Insurance contributions Class 4

Do you have to pay tax in retirement?

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More useful links

Income Tax - the basics

Learn about your employment rights, looking for work and more on GOV.UK (Opens new window)

Contact HMRC

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