Many students across the globe pursue higher education at university. However, some students will choose to study at an institution in a country other than their home country. This may be due to circumstance or personal preference. The UK is a popular choice for international students due the career opportunities available and the prestige of many universities here.
Whilst there are many benefits to studying the UK as an international student, there are some disadvantages too. If you are a student working and making more than £242 a week, you will have to pay mandatory National Insurance. National Insurance helps to pay for certain benefits and can give you certain benefits in return. You will usually pay National Insurance from when you start working till you reach state level pension age. This still applies to international students even if you don’t plan on living in the UK after your degree.
International student finance is a complex topic and there are many circumstances that could affect the taxes you pay. Read on to find out more about National Insurance contributions and income tax specifically.
Do international students pay National Insurance contributions?
National Insurance is split into a number of classes and the amount that you must pay is based on your class. There are currently four main classes. The difference between the classes is based on your profits and employment type.
Many international students aren’t self-employed and will be employed by a company or employer. In this case, you will pay Class 1 National Insurance and your employer will deduct this amount from your wages.
This will be shown on your payslip. If you are self-employed, you will either pay Class 2 if your profits are £6,725 or more a year or Class 4 if your profits are £11,909 or more a year.
You can use this calculator from Which? to find out how much you will need to pay for your National Insurance contribution. You can also look at this governmental guide for more about the different classes.
There are many opportunities to find work as an international student which will not take too much time from your schedule. Listed in this article on Think Student are just a few of the jobs you can do.
The types of benefits that your National Insurance contributions count towards include Basic State Pension, Additional State Pension, New State Pension and New Style Jobseeker’s Allowance as well as many more.
Do international students have National Insurance (NI) numbers?
To keep track of payments and make sure that your National Insurance (NI) contributions are recorded against your name only, you must have a National Insurance number. This is also sometimes referred to as a NINO number.
Most UK-nationals will be sent their NINO shortly in the months before their 16th birthday. NI numbers were initially mass allocated to all the children whose family were in receipt of child benefit claims. This will of course not be the case for international students, and you will need to apply for one.
Applying for a National Insurance number is completely free, and you can start by clicking here to go to its government website page. To start work, you will usually need to prove that you have the right to work in the UK. However, you will be expected to get a National Insurance number once you start the job.
A BRP stands for biometric residence permit. It is usually issued based on different conditions. This includes if you have applied to come to the UK for longer than 6 months or have extended your visa to longer than 6 months.
If you have a BRP, you may already have an NI number. Be sure to check the back of yours in case. To learn more about BRPs, check out this governmental guide.
For more information about National Insurances numbers, look at this governmental guide.
What other taxes must international students pay?
Whilst National Insurance payments are a must if you are employed, there may be some additional taxes you have to pay.
One tax you should be aware of is the foreign income tax. If you have any foreign income and it is used to cover your course fees or living costs, you will not be expected to pay UK tax.
However, if you are from a country without a double-taxation agreement for students, you will have to pay tax. In simple terms, the double-taxation agreement makes sure that you do not pay tax twice for the same income.
Check if your country has a double-taxation agreement with the UK by checking this link. You can also learn more about double-taxation agreements in this EU guide. Also, click on this governmental guide to learn more about foreign income tax.
It can be confusing handling your taxes and finances when you’re a student and it’s especially difficult as an international student. Make sure you are aware of any income and gains you have. Hopefully, this article has given you an insight on what taxes you should expect as an international student.