Archive Website of the UK government

If you work for an employer

If you're employed on a casual, temporary or part-time basis by law your employer must:

What about cash in hand?

It's illegal for your employer to pay you cash in hand without deducting tax and National Insurance contributions from your wages.

If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:

In addition you could end up having to pay the tax and National Insurance contributions yourself.

If you suspect your employer of not paying tax or National Insurance contributions on your wages you can report them in confidence using the Tax Evasion Hotline on Tel 0800 788 887. Lines are open Monday to Friday 8.00 am to 6.00 pm and are normally less busy before 9.00 am.

• Tax and National Insurance for the employed

• PAYE forms: P45, P46, P60, P11D

• Reporting tax fraud

• Reporting tax evasion Opens new window

• The cost of contacting 08 and 03 telephone numbers

If you work for more than one employer

If you work for more than one employer, you'll get a special tax code to take this into account.

Your tax allowances - amounts that you can get to reduce your tax bill - will normally be given against the pay from your main job. Your other job(s) will be taxed at the basic, higher or additional rate, depending on your total income.

• If you have more than one tax code

• Tax and National Insurance for the employed

Employment rights

All employees have rights, whether they are full or part-time, casual or temporary, including:

If you're concerned about your rights, you can ask a union for help or get free advice from your local Citizens Advice Bureau.

• Check the facts about employment rights and find a union Opens new window

• Find your nearest Citizens Advice Bureau Opens new window

If you're a pensioner

If you're a pensioner, that is, you are State Pension age or older, you don't need to pay National Insurance contributions on any earnings you receive but you may still need to pay Income Tax - follow the links below to find out more.

• Do you have to pay tax in retirement?

• Making sure you've stopped paying National Insurance

If you're a student

If you're a student, you still pay tax on your income unless all of the following apply:

Ask your employer for form P38S Student Employees - and tax won't be deducted from your earnings. National Insurance will still be deducted if you earn more than £146 a week.

Please note: From 6 April 2023 employers will no longer use the P38(S) process. Your employer will operate PAYE (Pay As You Earn) to deduct Income Tax and National Insurance from your wages. If you are employed by an employer who is part of the Real Time Information (RTI) pilot, the normal PAYE process will apply from 6 April 2012.

• Find out more about tax for students Opens new window

If you work for yourself

If you're self-employed on a temporary or part-time basis you must register for business taxes with HM Revenue & Customs (HMRC) as soon as you start work. You'll have to complete a Self Assessment tax return and are responsible for paying your own tax and National Insurance contributions on the income you earn.

Even if you don't think you'll earn enough to need to pay tax, you still need to complete a tax return.

• Self employed tax and National Insurance Opens new window

• Register for business taxes with HMRC Opens new window

Working for cash

You can accept cash payments for work you do, but it's illegal for you not to declare this on a Self Assessment tax return, and pay Income Tax and National Insurance contributions if these are due. This will depend on your overall taxable income in the tax year.

• Self employed tax and National Insurance Opens new window

Checking your employment status

It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and National Insurance contributions.

• Read more about how to work out if you're employed or self-employed

If you’re a pensioner

You stop paying Class 2 National Insurance contributions as soon as you reach State Pension age. You stop paying Class 4 contributions from the start of the tax year after the one in which you reach State Pension age. But you may still need to pay Income Tax.

• Do you have to pay tax in retirement?

• Making sure you've stopped paying National Insurance

Does how much you earn affect the tax you pay?

Everyone gets a personal tax-free allowance (basic Personal Allowance is £8,105 in 2012-13). You don't pay tax on anything you earn below this amount.

The National Insurance you pay also depends on your earnings or profits and whether you’ve reached State Pension age.

If you’re an employee, you do not pay any if you earn less than £146 a week (for the 2012-13 tax year).

If you’re self-employed, you may not have to pay Class 2 National Insurance contributions if you qualify for a Small Earnings Exception where your profits for the year are expected to be less than £5,595 for 2012-13.

Class 4 National Insurance contributions will only be due if your profits exceed £7,605 in 2012-13. If you're a pensioner, you don't have to pay National Insurance contributions.

• Personal Allowance

• National Insurance - the basics

• Class 2 National Insurance contributions Opens new window

• Class 4 National Insurance contributions Opens new window

• Do you have to pay tax in retirement?

More useful links

• Income Tax - the basics

• Employment rights, looking for work and more (employment section)

• Work and work-related issues (pensions and retirement planning section)

Useful contacts

• Contact HMRC Opens new window

• Money, tax and benefits contacts