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Starting work - National Insurance & tax
You do not receive all the money you earn. You have to pay tax on your earnings. On your pay statement you will notice a number of fixed deductions - everyone has to pay these.
Fixed deductions are:
- National Insurance
- Income Tax
- Union Subscription (if you are a member)
- Superannuation or pension (if eligible)
National Insurance
Everybody in work pays National Insurance. The amount you pay is based on what you earn, the more you earn the more you contribute. Your employer deducts your contribution from your wages.
You should receive your National Insurance number shortly before your 16th birthday. You are sent a card showing your National Insurance number. Keep this in a safe place. You will often need to know this number. If you lose your card contact the National Insurance Helpline - see contacts on this page.
Tax
Everyone has to pay tax on their earnings. The amount you pay depends on how much you earn. The money you pay in tax goes towards government spending on things like education, health and social security.
You will receive a tax code from the Inland Revenue, which shows how much tax you will pay. If you do not have a tax code or are starting your first job you will need to complete a P46. Your employer will send this off to the Inland Revenue. You will then receive your tax code.
Your tax is taken off by your employer who records the amount on your pay statement.
