You may have watched your parents struggle with the taxes, as they try to navigate paying all of their bills. As a student, this could definitely be seen as daunting, as everyone knows, most students are broke! Learning how to budget as a student can be extremely difficult, so most students get part time jobs. However, you need to be aware of whether the money you earn will be taxed or not.
There are different types of taxes which most people have to pay. Sadly, students are not exempt from this rule. If you earn up to £12,570 a year as a student, then you do not need to pay tax. If you earn above this amount, then you will need to pay something called income tax. The majority of students will then have to pay tax at a rate of 20% on anything earned above £12,570. However, you will be exempt from paying council tax.
Learning about taxes can definitely be tricky! Carry on reading if you want to get a true understanding of whether students have to pay tax or not.
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Do students pay income tax in the UK?
As a student, you may believe that you are immune from paying taxes. However, this is not the case! If you have a job as a student, you are required to pay tax if you meet a certain criteria.
In order to be eligible to pay tax, you must earn more than £1,042 a month on average. Therefore, if you earn less than this, then you do not have to pay tax.
This is because the £1,042 is known as your personal allowance. This refers to the amount of money you do not have to pay tax on. If you click here, you can find more information about this on the government website.
However, saving money can definitely be hard work! Check out this article from Think Student, to learn how to budget properly.
Income tax is usually deducted automatically. More information can be found on the Save the Student website, if you click here.
Do students pay council tax?
Council tax is the money you pay towards the local council. This is then used for important processes, such as rubbish collecting, local schools and street cleaning.
Good news! Being a student means there is a high possibility that you won’t have to pay council tax. This is the case if you are a full-time student.
To be a full-time student, you must be on a course that lasts a year and requires at least 21 hours of study per week. This will result in you being exempt from having to pay council taxes.
More information about this can be found on the Save the Student website, if you click here.
You also don’t have to pay if you are under 20 years old and are studying for a qualification up to an A-Level for at least three months. However, your household will have to pay council tax if not everyone is a full time student.
Despite this, you could still get a discount. If you do get a bill for council tax as a student, you can apply for an exemption. To find out more, check out the government website.
Do students pay national insurance?
National insurance is a mandatory payment and you will need to pay this if you meet a certain criteria. You must be sixteen or over and earning over £242 a week.
To pay national insurance, you will need a national insurance number. This should have been given to you when you turned sixteen years old.
The amount of national insurance you pay differs for each person. This is because it depends on your employment status and how much you earn. More information about this can be found on the government website, if you click here.
Are bursaries taxable?
Bursaries are defined as ‘free money’ given to students to help them complete their education. They are used to help students overcome financial difficulties, in order to experience all of the opportunities they deserve.
Bursaries are definitely needed because university is very expensive. Check out this article from Think Student to see why.
Therefore, bursaries are not taxable. If they were, then there is no point giving them out! You can find out more information on The Scholarship Hub website, if you click here.
If you are wondering how to apply for a bursary, check out the UCAS website, for top tips.
As you can see, understanding all of the different tax types can be very difficult! Hopefully, this article has outlined what taxes students have to pay, so that you can feel more secure in your knowledge.