Knowledge Centre

Employing Students

Students are like any other employees

Some employers get very cautious regarding their plans to employ students or casual workers to cover their busiest times. If you employ students you must treat them, for payroll purposes, in exactly the same way as any other employee. Including their eligibility for automatic enrolment.

When you employ a student

If you take on a new employee who’s a student, there are no special procedures to carry out. You should treat them in exactly the same way for tax and National Insurance purposes as any other employee. You must record their pay and tax details on your Full Payment Submissions (FPS). Correct contributions and compliant records for automatic enrolment also applies for seasonal staff.

Students must be paid at or above National Minimum wage from their 16th birthday.

It is worth noting that it may be in your interest to exit a student from your payroll at the end of their working period with you and issue a P45. This is primarily because, if the student remains on your payroll they continue to be your employee. Just because they are a temporary student does not remove your responsibility as an employer and they may:

    • Continue to accrue entitlements such as holiday leave/pay
    • Continue to be entitled to statutory benefits such as maternity pay
    • Become eligible for automatic enrolment into your workplace pension.
    • Have their tax allowance only allocated to your employment and therefore not receive their full tax allowance on other employment
    • May increase your costs with software licence fees/payroll provider fees

Students working for you from another country

In most cases, you should deduct tax and National Insurance from foreign students’ pay using the normal PAYE procedures used for any other employee.

However, in some circumstances, National Insurance contributions won’t be payable on the earnings of foreign students who work for you. However automatic enrolment criteria will still apply.

Avoiding employing someone illegally

If you’re going to employ someone, you must make sure they’re entitled to work in the UK before they start working for you. Just because the individual can give you a National Insurance number doesn’t prove that they’re entitled to work in the UK.

The UK Border Agency recommends that employers conduct checks on entitlement to work for all new employees to prevent illegal migrant working. If you don’t complete these checks, you could be charged a civil penalty of up to £10,000 per illegal worker. If as part of these checks you have reviewed the employee’s passport, you should make a note of the passport number because you need to include it in the employee’s first Full Payment Submission (FPS) to report their payroll information to HMRC.

Check someone has the right to work in the UK here

Recruiting temporary or casual workers

You must follow the same payroll procedures for temporary or casual employees as you do for your permanent employees. The length of their employment with you or the amount they are paid doesn’t make any difference to your payroll responsibilities including their eligibility for automatic enrolment.

If you employ people on a temporary or casual basis and your business pays them, you must:

  • calculate, record and deduct PAYE tax and National Insurance contributions (NICs) in the same way as any other employee
  • include the employee’s details on your FPS when you pay them
  • include them in your automatic enrolment assessment every pay period.

Harvest casual and casual beaters

HM Revenue & Customs (HMRC) has an existing agreement with the National Farmers Union that covers payments to harvest casuals and one with the Country Land & Business Association (formerly known as the Country Landowners Association) for casual beaters.

For further detailed information click here

If the worker is a volunteer

If the worker is a volunteer, who receives no pay or is only paid expenses that are not subject to tax or NICs, you don’t need to include their details on your FPS.