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 income tax and it's possible that all of the tax due on your income from both jobs will be taken from your second job.
For the financial year 2008/09, income above your personal allowance is charged at two rates:
- Any income up to £34,800 will be taxed at 20%;
- Any income over £34,800 will be taxed at 40%.
If, during the tax year from 6 April to the following 5 April, you have one part time (or in your case two part time jobs) your employer/s may well take tax and National Insurance contributions from you if you earn more than £105 per week.
If you don't earn more than the personal allowance, the HM Revenue & Customs will refund any overpayment of tax. However they will not refund NI contributions, but these will count towards your retirement pension.
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Question answered by CAB
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