Income Tax and National Insurance
If you have a job, you may need to pay income tax and national insurance on the wages that you earn.
If you’re an employee, income tax and national insurance may be deducted from your salary before you are paid depending on how much you earn.
Students are not exempt from paying income tax and national insurance.
More detailed information is provided in the Tax Guide for Students.
Income Tax
Income tax is a tax you pay on your income. Most people have a personal allowance of tax-free income. This is the amount of income which can be earned before having to pay tax. The standard tax-free allowances change each tax year (6 April to 5 April the following year); the gov.uk website has more information.
Your employer uses a tax code to work out how much income tax to take from your pay. You can find this on your payslips.
Your tax code will be made up of:
- Numbers – these refer to how much income you can have before you pay tax
- Usually one letter – this refers to your situation
It is important to check your tax code to ensure that you are not paying too much tax. If your tax code has a ‘W1’, ‘M1’ or ‘X’ at the end this is an emergency tax code. This means that your tax is based on what you have paid in the current pay period rather than over the whole tax year. If your tax code is ‘OT’ or BR, these are temporary tax codes that mean you will pay tax on all of your earnings – with no tax free allowance.
Income tax if you have more than one part-time job
The tax system treats one job as your main employment and will apply your personal allowance to that job.
If you have a second job, you could end up paying too little tax…
- if HMRC doesn’t know you have two jobs and is applying your personal allowance to both
- if what you earn from both your jobs makes you a higher-rate tax payer, but tax is deducted from your second job at the basic rate
Paying too little tax could result in you getting a big tax bill later on and being charged interest and penalties.
Alternatively, you could end up paying too much tax if the income from both your jobs adds up to less than your personal allowance.
If this is the case, you can ask HMRC to divide your allowance between your jobs or ask for a refund at the end of the tax year. You’ll need to send copies of P60s from your jobs to do this. Your employers will give you a P60 at the end of the tax year.
To avoid tax underpayments or overpayments, you need to:
- make sure HMRC knows you have more than one job (when you start your second job, complete HMRC’s new starter checklist from your new employer. This should help HMRC allocate the right tax code).
- check your tax codes for both your jobs to make sure they are correct – if you have more than one job, you’ll probably have more than one tax code.
You can notify HMRC of additional jobs, incorrect tax codes and update your contact details through your Personal Tax Account on the gov.uk website. You can also contact HMRC by calling 0300 200 3300. You can find more information on HMRC’s website.
National Insurance
National Insurance contributions are payable on your earnings and help to build up your entitlement to certain state benefits, such as the State Pension. You cannot opt out, even if you may never claim these benefits – all employees must pay National Insurance on their earnings above a threshold level. More details are on the gov.uk website.
You should obtain a National Insurance Number (NINO) to ensure that your tax and national insurance contributions are correctly recorded against your name.
Applying for a National Insurance number (NINO)
You can only apply for a NINO once you are in the UK and you must have the right to work or study here to get one.
To apply for a NINO see Apply for a National Insurance Number.
You can apply either before or after you get a job. You should tell your employer that you’ve applied for a number and give it to them when you have it.
Various documents may be needed to apply for a NINO. You might need to attend an appointment in person to prove your identity if you do not have the required documents.
- a passport from any country
- a biometric residence permit (BRP)
- a national identity card from an EU country or from Norway, Liechtenstein or Switzerland
This is not an exhaustive list and alternative documents may be needed if you cannot supply any of those listed above.
It can take up to 4 weeks to get your National Insurance number after you’ve proved your identity.
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Last Updated: 25th January 2024