Do Apprentices Pay Tax In The UK?

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Do Apprentices Pay Tax In The UK?

If you want to improve your skills and expand your career, you may try an apprenticeship. These are government-funded, work-based training programs, which are offered to people who are at least 16 years old. Apprenticeship is a combo of study and employment, which allows you to gain some experience and earn some money on the job. In this article, we will find out how apprentices pay tax in the UK if you assume the role of an apprentice. Read on to find out more. 

You can choose from a range of apprenticeships. For instance, you can go for a program that will give you enough experience to become a financial service administrator or a mortgage advisor. Before you apply, make sure you know what is involved in the process. For instance, it includes your hourly payment rate, your National Insurance payments, and the tax you need to pay. 

How much can you earn as an apprentice? 

The page you receive as an apprentice depends on many factors, such as your age, experience, qualifications, and the type of program you want to choose. You will receive a minimum wage of £3.90 per hour as an apprentice. 

Your employer may pay you more after you have completed your first year as an apprentice. Another condition for the pay raise is that you are more than 19 years old.  

Do you have to pay tax? 

Some people assume that apprentices are not required to pay tax, which is a misconception. Like regular employees, you will pay income tax while working as an apprentice. 

Here is the good news: if you don’t meet the minimum threshold, you won’t have to pay any income tax. For instance, between 2019 and 2020, apprentices who earned below £12,500 were not taxed. 

You will pay income tax based on the Pay As You Earn (PAYE) system. According to this system, the tax money will be deducted directly from your salary. Therefore, there is no need to fill in any Self Assessment tax return. 

Do apprentices have to pay National Insurance? 

If you are in the tax net, you will pay National Insurance as well. In 2020, this was a weekly amount of £166. If you are an apprentice,  you will probably have to pay according to Class 1 National Insurance. 

You will pay 12% of your earnings, which can be a weekly sum between £166 and £962.  If you pay more than that amount, you will contribute an additional 2% for your national insurance.

In short, you must understand the pay and tax rules if you want to become an apprentice. So, get a better idea of what you can expect as far as your finances are concerned. So, we suggest that you do your homework if you are opting for the role of an apprentice.

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