Taxing taxation
Question
I'm a full time university student and already have one part time job and I've just got another job working in a bar. I was wondering how much I'd get taxed on this second job. Someone told me it could be as much as 20% of all my earnings from the second job? I don't get taxed on my wage from my first job because I don't go over the tax threshold. So will I get taxed on my new wage?
Answer
As a student, you are subject to the same tax rules as everybody else. Providing you don't earn more than the personal allowance of £6,035 you won't have to pay any tax. But once you earn more than that you will need to pay tax and it's possible that all of the tax due on your income from both jobs will be taken from your second job.
There are currently two tax rates:£1 to £36,000: 20% (Basic rate) £36,001 and above: 40% (Higher rate). As well as tax, you will also have to pay National Insurance (NI) contributions if you earn more than £105 per week. (All figures apply for 2008-09 tax year.)
If, during the tax year from 6th April to the following 5th April, you have one part time (or in your case two part time jobs) your employer/s may well take tax and NI contributions from you if you earn more than £94 per week. If you don't earn more than the £5,435, the Inland Revenue will refund any overpayment of tax. They will not, however, refund NI contributions, but these will count towards your retirement pension.
Good answer? Bad info? Want to tell us what you think? We'd really like to hear what you've got to say about this answer so please click here to take the survey. Your feedback is confidential and as anonymous as you like.
