Students and Part-Time Workers — Do You Pay Tax in the UK? A 2026 Guide

One of the most common tax questions from students and young workers in the UK is a simple one: do I actually have to pay tax? The answer depends on your total income for the year, not just what you earn in one job or one term. And thousands of students overpay tax every year because they do not know how to check their tax code or claim a refund.

This guide explains the rules clearly for 2026/27.

The Personal Allowance — Your Tax-Free Threshold

Every UK resident has a personal allowance of £12,570 in 2026/27. This is the amount you can earn before paying any income tax. It applies regardless of your age, whether you are a student, and whether you are employed or self-employed.

If your total income from all sources in the tax year is below £12,570, you owe no income tax at all. For most students working part-time during term and full-time during summer, this means no tax liability — but you may still have tax deducted at source through PAYE if your employer does not have the correct information.

Why Students Often Have Tax Deducted Incorrectly

Employers use PAYE (Pay As You Earn) to deduct income tax and National Insurance from wages. The system is designed for continuous employment throughout the year. Problems arise for students because:

Emergency tax codes: If your employer does not have a P45 from a previous employer or you are starting work for the first time, they may put you on an emergency tax code (such as 1257L W1 or 1257L M1). This taxes each pay period in isolation rather than cumulatively, which can result in overpayment.

Multiple jobs: If you work two part-time jobs, each employer applies their own tax code. The second employer typically uses a BR code, which taxes all earnings at 20% with no personal allowance. If your total income across both jobs is below £12,570, you have overpaid tax.

Seasonal or term-time only work: If you only work for part of the tax year, your employer may deduct tax as if you will earn at the same rate all year. If you stop working before April, you may have overpaid significantly.

How to Claim Back Overpaid Tax as a Student

If you have had tax deducted and your total income for the year is below £12,570, you are entitled to a refund of everything that was deducted.

If you are still employed: Contact HMRC by phone (0300 200 3300) or update your tax code through your Personal Tax Account at gov.uk. Once your code is corrected, your employer will stop deducting tax and may refund overpayments through payroll.

If you have left the job: Your employer should have given you a P45. If you are not taking another job immediately, complete form P50Z (claim for repayment if you have stopped working) at gov.uk. HMRC will calculate your refund based on the tax paid and your total income for the year.

After the tax year ends: If neither of the above applies, HMRC often issues a P800 tax calculation automatically after the year ends, telling you a refund is due. You can claim it online through your Personal Tax Account. If you have not received a P800 and believe you have overpaid, call HMRC directly.

National Insurance for Students

National Insurance is separate from income tax and works differently. You pay employee NI contributions at 8% on earnings above £242 per week (£12,570 per year). Below this, no employee NI is due.

There is no student NI exemption. If you earn above £242 in a single week, NI is deducted on that week's earnings regardless of whether you earn less in other weeks. Unlike income tax, NI is calculated week by week rather than cumulatively across the year — which means you cannot reclaim NI the same way you can reclaim overpaid income tax.

Self-Employment and Side Income for Students

Many students have income beyond a part-time job — tutoring, freelancing, selling on Etsy or Vinted, or creating content. If this income exceeds £1,000 in the tax year, you must register for Self Assessment and declare it.

Your self-employment income is added to your employment income to calculate your total for the year. If the combined total is still below £12,570, you owe no tax but you may still need to file a return depending on the level of self-employment income.

Student Loans and Tax — How They Interact

Student loan repayments are collected through PAYE alongside income tax and NI once your income exceeds the repayment threshold. For Plan 2 loans (most students who started after 2012), the threshold is £27,295 per year. For Plan 5 loans (those starting from 2023/24), the threshold is £25,000. Repayments are 9% of income above the threshold.

Student loan repayments are not tax — they are collected through the tax system but represent repayment of your loan. They are not refundable in the same way overpaid income tax is.

Starting Full-Time Work After Graduation

When you start your first full-time job, make sure your employer has your correct tax code from the start. If you have not worked before, you will be on a starter declaration (previously called a P46). Ensure you complete it correctly — if you indicate this is your only job, your employer will use the standard 1257L code. If you leave a blank or make an error, you may end up on an emergency code and overpay tax for several months until it is corrected.

Frequently Asked Questions