From April 2022 the national rates of pay per hour are:
The National Living Wage for ages 23 and above: £9.50
The National Minimum Wage for 21 to 22-year-olds: £9.19
For 18 to 20-year-olds: £6.83
For under-18s: £4.81
For apprentices: £4.81
From April 2023 the national rates of pay per hour will be:
The National Living Wage for ages 23 and above: £10.42
The National Minimum Wage for 21 to 22-year-olds: £10.18
For 18 to 20-year-olds: £7.49
For under-18s: £5.28
For apprentices: £5.28
There are 2 taxes on your earned income: Income tax and National Insurance Contributions (NIC). Your national insurance contributions build up your right to claim social security in future e.g. state pension and unemployment benefit. They are calculated and deducted on a monthly basis according to what you earn, and cannot be claimed back once paid. Income tax is basically a compulsory contribution to the government, to help them finance public services. The amount you pay depends on your annual, rather than monthly, earnings. Everyone is entitled to take some of their earnings home (income) tax free each year. Any earnings above that limit are taxed.
Tax complications can arise for students because of their working patterns and because most employers deduct tax through a Pay As You Earn (PAYE) scheme. If you have a part time job throughout the year then the PAYE scheme should calculate your income tax correctly. However, if you work full time during the holidays and not during term time, the PAYE scheme can let you down and deduct more tax from your pay packets than you should pay.
If PAYE has let you down and deducted more income tax than it should have done, you can claim the overpaid tax back. The Inland Revenue have provided a student tax checker on their website to help you see whether you have paid too much tax – student tax checker. If you have paid too much then you need to contact your local tax office and complete a P50.
