Information for Students

Introduction

If you Temp through an agency during your college/university holidays, you are requested to complete a Student Declaration Form. This declaration will entitle you to a tax code NT (no tax) which means that while you are working during your holidays you will not pay tax unless you earn in excess of £10,000 per tax year.

As most students rarely manage to earn this much during their summer, Christmas and Easter break, the chances are that you will never pay tax if you work outside term time.

Our payroll department will highlight any student who reaches this higher level of pay as soon as this occurs, so we can let you know your tax situation before it becomes a financial burden. Earnings are assessed during each new tax year which runs from 5th April for 12 months.

You need to know

  • The threshold of £10,000 is the annual free pay this tax year for every individual with an entitlement to work. This includes students.
  • Once a worker (that means any worker including you) exceeds the earning level of £10,000 per year, they have to pay tax.
  • In order for the government to assess peoples taxable income, free pay is deducted from actual pay. Anything in excess of this free pay is taxable. This is calculated according to when payment is made. If you are paid weekly, your free pay has to be assessed on a weekly basis so free pay of £10,000 per annum is divided by 52 representing 52 weeks in a year. Weekly free pay is therefore £192.31 per week.
  • This weekly free pay allowance is identified by the individual tax code.
  • This figure (of free pay entitlement) is then deducted each week or month from the gross earnings and tax is paid on the rest.

Make sure you know

  • As a student you are only expected to work during your holidays. The chance of you earning, therefore, in excess of your total free pay allowance during your 3 holidays per year is highly unlikely. For this reason the government allow you an NT code (no tax).
  • However, if during the year you earn in excess of the £10,000, even during your holidays, and even being a full time student, you have to pay tax on the excess.
  • If you finish your further education and stay Temping for us, or any agency you will be given a tax code and your NT code will be cancelled. You will need to call into the office to complete the relevant forms.
  • If you work during term time you will not be entitled to a NT code. You can only have this code if you work during statutory school/college holidays.
  • If you are fortunate enough to earn in excess of £10,000 during the tax year be prepared to receive a bill from the Inland Revenue.
  • The threshold of £10,000 is the annual free pay this tax year for every individual with an entitlement to work. This includes students.
  • Once a worker (that means any worker including you) exceeds the earning level of £10,000 per year, they have to pay tax.

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