National Insurance (NI), tax and minimum wage

Working in the UK means your earnings may be subject to certain deductions and standards. Please find below information on the National Minimuum Wage, National Insurance (NI) and Tax.

National Insurance (NI)

You have a National Insurance number to make sure your National Insurance contributions and tax are recorded against your name only. The UK Government will make deductions from your wages for National Insurance (NI) contributions, which are used for funding the state welfare system (e.g. NHS and benefits). If you earn above £183 a week your wages will be deducted for NI contributions. You cannot reclaim NI deductions.

If you don’t have a National Insurance number, you can apply for it only once you are in the UK. You must have the right to work or study in the UK to get a National Insurance number. To do this you need to call the National Insurance number application line on 0345 600 0643. You may be asked a number of questions (e.g. your personal details, employers details) and may then be required to attend an appointment at a local Jobcentre Plus branch. You will be asked to bring documents to this appointment so that they can be checked. 

This procedure can take a number of weeks, therefore during this time you can work using a temporary NI number. You should be able to get this from your employer. If not then contact the Guild of Students or the Advice and Representation Centre (ARC) for further information.

For further up-to-date information on National Insurance application process please check the Government website.

Tax

Everyone in the UK, including students, has to pay tax on their earnings. The government department that deals with this is called the Inland Revenue. The amount of tax that you have to pay depends on how much you earn. The tax is paid by your employer and is deducted from your wages each time you are paid (known as 'PAYE'- pay as you earn). This will be displayed on your payslip.

All adults are entitled to a 'Personal Allowance' which is an amount of income that you can earn without being taxed on it each year. 

The amount you earn over the personal allowance will be taxed. Please note that personal allowance can change from year to year. You can find up-to-date information on national insurance contributions and tax on the UK government webpages. 

If your employer has taxed you (e.g. if you earn above the personal allowance each week or month) but you do not earn above your personal allowance during the tax year (£12,500 per year), you can reclaim the tax that you have paid from the Inland Revenue.

If you only intend to work during vacations and do not expect to earn more than the personal allowance in the tax year, you should ask your employer for a P38(S) form. By completing the form your employer will not deduct tax from your wages.

For further information on income tax please visit the HMRC income tax pages or telephone Income Tax enquiries on 0300 200 3300.

How much is the minimum wage?

Workers in the UK have a National Minimum Wage, which is set by the government. The minimum wage a worker should get depends on their age and if they’re an apprentice. The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 23. It does not matter how small an employer is, they still have to pay the correct minimum wage.

For further information please visit: the HMRC national minimum wage pages or contact the ACAS helpline on 0300 123 1100.