Careers & Employability

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Pay, Tax and Holiday Entitlement

Part-time employees have the same statutory employment rights as full-time employees. You do not have to work a minimum number of hours to qualify for employment rights.

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

Pay

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.

For any further pay advice please see the Directgov website http://www.direct.gov.uk/en/Employment/

 

National Minimum Wage

The National Minimum Wage (NMW) is a minimum amount per hour which most workers in the UK, including part-time workers, are entitled to be paid. The rate is reviewed every year and any changes take place in October.

All employers have to pay the NMW to workers who are eligible for it – there are no exceptions for different types or size of employer. Where you work in the UK makes no difference to the level of NMW you should receive.

National Minimum wage from April 2016 is:

Age 25 and over - £7.20 (also known as National Living Wage (NLW)

Age 21–24 - £6.70

Age 18–20 - £5.30

Under 18 - £3.87

Apprentice - £3.30

 

The Careers Centre does not advertise any positions which do not pay NMW. It is against the law for an employer to pay you less than this.

Please contact the Careers Centre if you have any questions or concerns about your pay.

For any further pay advice please see the Directgov website http://www.direct.gov.uk/en/Employment/

 

 

Tax

If you have a job when you’re a student you may need to pay Income Tax and National Insurance.

Tax and National Insurance

You have to pay:

Your employer will usually deduct Income Tax and National Insurance from your wages through Pay As You Earn (PAYE).

If you’ve paid too much tax:

If you’ve paid tax and stop working part way through the tax year you may be able to claim a refund.

Use HMRC’s tax checker to find out if you might have paid too much tax, or contact HMRC.

What is income tax and when do I have to pay it?

Income Tax is your contribution to government spending and is used to pay for services such as education, defence, social security and law and order.
If you earn over a certain amount of money per year you will need to pay Income Tax.

If you work for someone else, your Tax and National Insurance will be paid automatically. It comes straight out of your wages before you even receive them. The amount deducted will appear on your wage slip and they will pay your Tax directly to the Inland Revenue for you. This is known as Pay As You Earn (PAYE). The Tax year runs from 6th April to 5th April each year.

How much tax do I pay?

You do not pay tax on all of your earnings. Everyone receives a personal allowance, which is shown to the employer in the form of a code so that they know what your personal allowance is.

You will have to pay:

Your employer will usually deduct Income Tax and National Insurance from your wages through Pay As You Earn (PAYE) - see above for more information about PAYE.

If you earn above £917 a month or £11,000 per year, the amount of tax you pay depends on the amount you earn.

 

Band Taxable income Tax rate
Personal Allowance Up to £11,000 0%
Basic rate £11,001 to £43,000 20%
Higher rate £43,001 to £150,000 40%
Additional rate over £150,000 45%

 

If you are working in a temporary job where your pay exceeds the tax threshold for your weekly or monthly personal allowance you will pay tax on your earnings, but if you then go on and don't exceed the annual personal allowance in the rest of the tax year you may be entitled to a refund.

For any further tax advice please see the Directgov website; http://www.direct.gov.uk/en/Employment/

Tax Forms

When you begin your employment, you need to fill in a Tax form to ensure your employer does not deduct too much tax. The type of form will depend upon the circumstances.

If you have worked within the current tax year?

If you have a P45 from a previous employer you will need to give it to your new employer, otherwise too much tax may be deducted. Make sure you do not lose this form as copies are NOT available.

If you have not worked in the current tax year?

If this is your first job or you have not previously worked in the current tax year your employer will ask you to complete a 'Starter Checklist' for HMRC to calculate your new tax code. Amongst other details you will need to include your National Insurance Number.

Final tax code?

At the end of the Tax year you’ll receive a P60 from your employer. The P60 confirms your final Tax code for the year and gives details for the year that has just ended.

 

Holiday Entitlement

There is a minimum right to paid holiday, but your employer may offer more than this. The main things you should know about holiday rights are that:

 

In order to qualify for the right to annual leave you need to be classed as a worker. If you are self-employed, you have no statutory right to paid annual leave.