There is no special student exemption: wages from a part time or summer job are taxed through PAYE like anyone else’s. For the 2026 to 2027 tax year you pay Income Tax only on income above the £12,570 Personal Allowance, and employee National Insurance if you earn more than £242 a week from one job. Short summer jobs are often overtaxed because of emergency or Week 1/Month 1 codes, and the excess can be reclaimed during the year on form P50 once you return to full time study, or after the year ends through a P800 calculation.

Do students have to pay tax on their earnings?

Yes, if they earn enough. GOV.UK’s guidance on student jobs says students pay Income Tax if they earn more than £1,048 a month on average, which is the monthly equivalent of the Personal Allowance, and National Insurance if they earn more than £242 a week. The employer deducts both through PAYE.

For the tax year running from 6 April 2026 to 5 April 2027, the standard Personal Allowance is £12,570 and basic rate tax of 20% applies to taxable income from £12,571 to £50,270. Scottish taxpayers have different bands, explained in Scottish income tax. The key point for students is that Income Tax is an annual tax. Someone who earns £6,000 across a summer and nothing else in the year has no Income Tax liability at all, even if tax was taken from their pay.

National Insurance works differently. Mandatory contributions apply from age 16 to employees earning more than £242 a week from one job. HMRC’s National Insurance Manual (NIM01003) explains that liability is worked out by reference to an earnings period for each employment. A student who earns more than the weekly or monthly threshold in a particular pay period pays some National Insurance for that period, even if their earnings for the whole year are low. For 2026 to 2027 the main employee rate is 8% on earnings between £242 and £967 a week. Earnings between £129 and £242 a week are treated as if contributions were paid, which protects the National Insurance record without any deduction.

Why do summer jobs so often take too much tax?

PAYE normally works cumulatively, giving the employee the benefit of their allowance from 6 April onwards. A new starter without a P45 may instead be put on an emergency code. GOV.UK explains that a code ending in W1, M1 or X (or marked NONCUM on the payslip) is an emergency code, and that tax is then worked out on that week’s or month’s pay only, as if the employee were paid that amount every week or month of the year. The emergency code from 6 April 2026 is 1257L.

If you have no P45, your employer uses the starter checklist. You choose one of three statements, and the employer instructions on the checklist say which code follows:

Statement When it applies Code used
A This is your first job since 6 April and you have not received Jobseeker’s Allowance, Employment and Support Allowance, Incapacity Benefit or a pension since then Current Personal Allowance, cumulative
B Since 6 April you have had another job but have no P45, or have received one of those benefits Current Personal Allowance on a Week 1/Month 1 basis
C You have another job or receive a State, workplace or private pension BR, so all pay is taxed at basic rate

HMRC’s employer help card adds that if the starter checklist cannot be completed, the employer should use code 0T. GOV.UK says HMRC usually updates the code once it has details from the new and previous employers, which can take up to 35 days. A student who keeps a term time job and takes a second summer job will correctly tick statement C, so the summer job is taxed at 20% from the first pound until HMRC issues a revised code. You can check your code and update your details through HMRC’s online Income Tax service. The meaning of each code and suffix is covered in PAYE tax codes.

What does overpaid tax look like in numbers?

Illustration only. Sam lives in England. He had a term time job that ended in May and earned £600 from it after 6 April. He did not hand his P45 to his summer employer, so he ticks statement B and is taxed on a Month 1 basis. He earns £1,800 a month for July, August and September, then returns to university full time.

  • Each month only about £1,048 of allowance is given, so roughly £752 is taxed at 20%, which is about £150 a month and about £450 over the summer.
  • His total income for the year is £6,000, well below £12,570, so the correct Income Tax for the year is nil. The tax deducted is all overpaid.
  • His monthly pay is also above the £1,048 monthly National Insurance threshold, so about £60 a month of National Insurance is deducted. Because National Insurance is assessed on each pay period, that amount is not refunded at the year end in the way Income Tax is.

How do you claim the tax back?

During the tax year. HMRC’s P50 guidance says you may be able to claim back Income Tax now if you have recently stopped working, and it lists returning to full time study as one example. Before claiming you need to have had your final pay, check whether you will have other taxable income or benefits before the end of the tax year, and have parts 2 and 3 of your P45 or explain why you do not. You cannot claim on P50 while still registered with an employment agency, and you should not use it if you expect to start a new job within 4 weeks, because the new employer will refund the tax through your pay. The process, and when it is better to wait, is covered in claiming tax back after leaving a job.

After the tax year ends. If you do nothing, HMRC reconciles your PAYE record after 5 April and may send a P800 tax calculation showing a refund. Section 43 of the Taxes Management Act 1970 generally allows a claim for relief up to 4 years after the end of the tax year concerned, so a student who missed a refund from an earlier summer can still look back.

Will student loan repayments be taken from my wages?

Usually not while you are still studying. Question 12 of the starter checklist asks whether you are still studying on the course your loan relates to, left your course after the start of the current tax year, have repaid in full, or pay the Student Loans Company by Direct Debit. If any of those applies you go straight to the declaration and no plan is selected, so the employer has no instruction to deduct. Once you have left your course the plan type you are on depends on where you applied and when your course started; for Student Finance England, Plan 5 applies to courses starting on or after 1 August 2023. The payroll side is explained in student loan deductions through payroll.

What if I earn money on my own account?

Tutoring, selling items you make, freelance design or content creation are self employment rather than a job. GOV.UK says that if you work for yourself you need to fill in a Self Assessment return. However, if your gross trading income for the tax year is £1,000 or less, the trading allowance usually means it is tax free and you do not need to tell HMRC. Above that, you must register for Self Assessment by 5 October after the end of the tax year.

What about holiday jobs abroad and international students?

GOV.UK says that if you normally live and study in the UK but work abroad during the holidays, you pay UK tax on earnings above your Personal Allowance, and UK National Insurance if you work for a UK employer. With a foreign employer you do not pay UK National Insurance but may have to contribute in that country. For students from abroad working in the UK, some double taxation agreements mean the earnings are not taxed in the UK while you study; if there is no such agreement, you are taxed like anyone else who comes to live in the UK.

What mistakes do students make?

  • Not handing over the P45. GOV.UK says giving your P45 to the new employer can help take you off an emergency code.
  • Ticking statement C with only one job. That puts all pay on code BR and loses the Personal Allowance in that job.
  • Assuming tax deducted is final. Income Tax is reconciled over the year, so check whether a refund is due.
  • Expecting a National Insurance refund. Contributions properly due on a high earning pay period are not repaid just because annual earnings were low.
  • Throwing away payslips and the P45. You need them to check a P800 or support a P50 claim.

Scholarship and bursary income is a separate question; see scholarships and bursaries: are they taxable.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.