Tax and National Insurance Contributions (NICs)
All payments made by the University are subject to the deduction of tax and NICs, where the individual claimant is considered to be employed for tax purposes. All students who receive payment for work performed on behalf of the university will be classed as employees for the purposes of tax and national insurance deductions and therefore subject to the normal conditions of PAYE.
The Pay as you Earn (PAYE) system is a method of paying income tax. Tax is deducted from your wages or occupational pension before paying you your salary. This means that you pay tax over the whole year, each time you are paid. Your employer is responsible for sending the tax on the the HM Revenue and Customs.
Your tax code is normally expressed as a number and a letter (e.g. 647L) and this determines your tax-free allowances.
If your tax code is 647L, you are entitled to £6479 tax-free allowances during the course of the tax year. This will be in either 12 or 52 equal amounts depending on your pay frequency. It does not mean that you do not pay tax until you have earned £6479.00
BR means that you are being taxed at basic rate (20%) and are not receiving any tax-free allowances. You should submit a P45. If you do not have a P45 you can print a P46 here (HMRC P46 form). You should forward your completed P46 to the payroll department.
You pay National Insurance Contributions (NICS) to build up your entitlement to certain social security benefits, including the State Pension. The type and level of NIC you pay depends on how much you earn and whether you are employed or self-employed. You stop paying NICs when you reach State Retirement age.
Your National Insurance table will depend on whether you are a member of one of the University's pension schemes. If you are a member of a university pension scheme, the benefits you accrue are generally better than state provision. This means you will "contract-out" of the top up pension benefit available from the government, commonly known as SERPS or the State Second Pension. If this is the case, you will pay less National Insurance Contributions, identified by the table letters D and E.
If you are not a member of a university pension scheme, you must pay into, or "contract-in" to the state's top up benefits. This means a higher rate of National Insurance Contribution than is due under D or E and is identified by table letters A and B.
The University must ensure that all payments to individuals comply with UK regulations relating to the engagement and payment of overseas workers. Where the individual does not have Home Office approval to work in the UK, the University is not in a position to make payment in any circumstances.
Note that payment will not be made unless the Ethnic Origin and Gender are entered on the claim form.
All payments to students should now go through Worklink.