Tax & Rights
Employment rights
Minimum wage
Nearly all workers are entitled to the National Minimum Wage including part-time workers. The following are the legal requirements with effect from 1 October 2008:
If you are 18 –21 years: £4.83
If you are 22 years plus: £5.80
The size of the business or sector of employment or regional area does not affect this.
Written contracts
Having a written contract can minimise conflicts with employers because both parties know what their responsibilities are. Under the Employment Rights Act 1996 your employer is required to issue you with a written statement of the main terms of your employment within two months of your employment commencing.
Avoids possible disputes. E.g. if you agreed to work for £7 per hour, but realised you were only getting paid £6.25 per hour, it would be hard to prove what the original agreement was without having it written down. Therefore ensure you read your given contract accurately.
Things included in a written contract are: Dates of commencement, Rate of pay, Contracted hour, Absence/Sickness, Termination of employment notice period and more depending on the company and type of position.
Induction
Many employers will issue you with an induction pack when you first start your job. Make sure that you read any leaflets/documents thoroughly as there will be important information.
If any induction training is offered, it is sensible to attend, whether it is compulsory or not. Make sure that you ask any questions that you have. No question is a silly question! It will mean that many potential conflicts at work can be avoided (e.g. cigarette breaks? appropriate uniform?)
Keep a record
Make sure you keep a record of all the hours you work, particularly if you have done overtime. It is a good idea to get your boss to sign to the hours that you have done so that there can be no disputes. This means that if an error is made and you do not get paid for all your shifts, you can easily prove the actual hours that you worked. If you are supposed to sign in, or clock in and out; make sure that you do!
Take health & safety seriously
Take responsibility to familiarise yourself with health and safety procedures - and stick to them!This extends to before and after work -don’t walk home alone. Make sure that you have transport arranged. Your mental health is just as important. As a full time student, we don’t recommend that you work any more than 16 hours per week during the academic year.
Complaints
If you do have a complaint at work or a dispute arises, put your points in writing to your employer. Having a thorough written record will always add more weight to your argument if you end up pursuing your case in a tribunal or county court.
Holiday pay
Workers are entitled by law to a minimum of 5.6 weeks paid holiday a year. This includes part-time workers and workers on a fixed-term contract. This is the minimum amount of holiday you can take. Your contract of employment may give you more holiday than this, but it cannot give you less. Even if your contract gives you less than four weeks, you will still be entitled to take four weeks paid holiday from work.
Useful links
If you're having employment problems, come and speak to the Union Advice Centre
Tax
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 more you earn, the more you pay. The Tax year runs from 6th April to 5th April each year. You do not pay Tax on student grants, student loans, most research awards and scholarships.
When will I start to pay tax?
You will pay Tax immediately, not just after you have earned your personal allowance, as the Tax deductions are spread over the year according to your weekly earnings. However, if you begin work several months into the Tax year you may not pay Tax immediately. This will depend upon your wages and individual job circumstances.
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. The standard personal allowance for a single person in the Tax year 2009 - 2010 is £6,475. Above £6,475, the amount you pay depends on the amount you earn.
Up to £6,475 Tax Free
Over £6,475 20%
(basic rate)
Over £36,000 40%
(higher rate)
In previous years there was a starting rate of 10% which applied to earnings over the starting rate but less than approx. £7,500. This has now been scrapped and replaced with this two tier tax system.
If your income exceeds your allowance and you have a tax code from a previous employer or a new employer you will pay 1/52 on the amount above your wages. However many employers may not do this and use emergency tax which is 20 per cent of your entire pay packet.
What happens if I have paid too much tax?
If you think you have paid too much tax then you can ask your local tax office in April and you will be repaid for any excess tax you have paid.
Which form do I need?
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.
P45 – you will be given one of these when you leave employment. 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.
P46 – fill this in if you have not previously worked in the current tax year. If you secure more than one job you should again ask for a P46 but do not tick any of the boxes at the top or sign the declaration.
P38S – if you are planning to work in the vacations only and you know your income will not exceed the personal allowance you can ask to sign a P38 to stop Tax being deducted. However, if you intend to work during term-time you should not fill in one of these forms, even if you are not going to reach your personal allowance threshold.
P50 – If you think that you have paid too much Tax, you can fill in this form to claim back your overpayment, this is done in April which is the end of the Tax year. You can check if you are due a refund by using the Inland Revenue's Tax checker.
P60 — 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.
National Insurance
What is national insurance?
Your National Insurance number is a unique reference code. The Contributions Agency and Inland Revenue use this to file the information that they have about you. National Insurance contributions are collected by the Inland Revenue. National Insurance contributions go towards benefits, such as a healthcare and unemployment benefits.
Your file contains information about the contributions you have paid and any benefit entitlement which you may have built up.
A National Insurance number is made up of a combination of letters and numbers – two letters, six numbers and then another letter, for example: JZ 56 27 96 D.
Every UK citizen is issued with a National Insurance number and this can be found on documents such as P45s, P60s, wage slips and other correspondence from the Inland Revenue. If you are a UK citizen and do not know your National Insurance number, contact the Contributions Agency on 08459 157006 who will trace it for you.
Why do I need a number?
When you begin a job your employer will want to know what your National Insurance number is. This is to prove that you are eligible to work in the UK and they can provide the Inland Revenue and Contributions Agency with information of the deductions, which they make from your wages. There are two types of National Insurance contributions that will affect students working for an employer. Primary contributions are paid by you if you work as an employed earner (employee), you are over 16 and under state pension age, and your earnings reach a certain minimum level (the Earnings Threshold). The rate for most people is currently 11%. Secondary contributions are paid by your employer. The amount they pay is dependent upon how much you earn. It is currently paid at a flat rate of 12.8%. Primary and secondary contributions are both paid directly to the Contributions Agency by your employer, and the primary earnings they have deducted from your salary will appear on your pay slip. The P60 that you receive at the end of the financial year will detail all National Insurance Contributions that you have made in that employment during the financial year. If you change any of your details, such as your title, name or address you should notify the Contributions Agency so that their records can be kept up to date.
Are students exempt from paying national insurance?
No
I'm an international student, do I need a national insurance number?
If you are not a British Citizen, you will require a National Insurance number to work. To check your eligibility to work please see our leaflet for International Students. You don’t need a NI number before you start work. You can apply for a National Insurance number as soon as you receive your first pay slip. You then need to contact the Job Centre on 0845 6000 643 to arrange an appointment with an advisor. You must do so this as soon as possible once you have received your first pay slip, as it can take several weeks for the number to be allocated. When you go for your appointment you will need to take your pay slips, some form of ID and other documents with you – check the requirements when you make your appointment.
Useful links:
To apply for a NI number in Preston contact 0845 6000643
