Many students do not have to pay income tax because their earnings are below the tax-free threshold (£11,000 in 2016/17).
Students’ income is generally erratic, and most find themselves paying tax early in the tax year because their cumulative earnings, calculated on a weekly basis relative to the time period which has elapsed since the start of the tax year, fall temporarily above the threshold. The current tax year runs from 6 April 2016 to 5 April 2017.
If students continue to work, any excess tax paid in the early months will be returned, either via their payslips as the year wears on or by completing a tax return. This can only be done after the tax year has ended. Further information is available via GOV.UK.
Important points for students to remember are:
- Bursaries are never taxed
- Wages and other earnings are potentially taxable, on exactly the same basis as for any other employee
- There are no exceptions for international students.