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)

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 will be asked a number of questions (e.g. your personal details, employers details) and will 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 information on National Insurance please phone the National Insurance Enquiry Line: 0300 200 3500.

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. For most individuals, the personal allowance from April 2020 is up to £12,500 per year (£1,042 per month on average). 

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 more 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. This is the legal minimum amount per hour that an employer must pay. There are different rates for different ages. The minimum salary thresholds from April 2020 are:

• The minimum wage for workers aged under 18 is £4.55
• The minimum wage for workers aged between 18-20 is £6.45
• The minimum wage for workers aged between 21-24 is £8.20
• The minimum wage for workers aged 25 and over is £8.72

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