There are special rules for ‘student employees’. A student employee is in full-time education and only works during the holidays. This means they do not work in the evening or weekends during term time either. Provided they meet this condition and earn less than the personal allowance (£8,105 2012/13), you do not need to deduct tax from them. Ask the student employee to complete form P38(S) Student Employees
However, if they earn more than the lower earnings limit (£107 per week 2012/13) their wages should be recorded on a P11 Deductions Working Sheet or your equivalent payroll systems and you should complete form P14 End of Year Summary for them at the tax year end.
Student employees are treated like normal employees for National Insurance purposes. So if they earn more than the employees’ earnings threshold (£144 per week 2012/13), then you will have to pay employers’ NI as normal. Furthermore, you will have to start deducting employees’ NI from the student if they earn above the upper accrual point (£146 per week 2012/13).
Please note, under current plans, form P38(S) will; be withdrawn from 6 April 2013 which will mean students will be treated in the same way as all other employees for PAYE and NI purposes.
If you would like any assistance in preparing your payroll, please get in touch with your local TaxAssist Accountant who would be happy to help you.rsquo; NI as normal. Furthermore, you will have to start deducting employees