Do apprentices get taxed?

18 December 2019

An employer and an apprentice calculating how much tax they will pay.

If you’re looking for a way to enhance your skills and further your career, an apprenticeship could the ideal path for you. These work-based, government-funded training programmes are available to people aged 16 and over. Offering a combination of study and employment, they give you on-the-job experience and allow you to earn money as you learn.

You can take your pick from a whole range of apprenticeships, including programmes that train you to become a mortgage adviser or financial services administrator. Before you apply for these training options though, it’s important that you understand exactly what they involve, including the pay you can expect to receive.

Here, we outline how much apprentices are paid, how much they are taxed and whether they have to pay National Insurance.

How much do apprentices earn?

The amount you earn as an apprentice will depend on a number of factors, including your age, existing qualifications and experience, as well as the type of programme you apply for. However, there is a minimum wage set out for all those enrolled on apprenticeships. In the financial year 2019/20, if you’re aged between 16 and 18 or you’re in the first year of your apprenticeship and you’re aged 19 or over, you’ll earn a minimum of £3.90 per hour. If you’ve finished your first year and you’re 19 or over, you’ll make at least the National Minimum Wage, which varies in line with your age.

Do apprentices have to pay tax?

It’s often assumed that apprentices don’t have to pay tax, but this is incorrect. As an apprentice, you will in fact be expected to pay income tax in the same way as everyone else. It’s important to bear in mind though that depending on your per-hour earnings and the number of hours you work each week, you may not meet the threshold beyond which income tax is owed. For the year 2019/20, if you earn less than £12,500, you will not be required to pay this type of tax. Any earnings above this threshold (known as your personal allowance) will be taxed at the appropriate rate.

As an apprentice, you will normally pay income tax through the Pay As You Earn (PAYE) system, meaning that any money owed will be taken directly from your pay. You therefore won’t have to fill in a Self Assessment tax return.

Do apprentices pay National Insurance?

You will have to pay National Insurance as an apprentice if you earn more than the specified threshold. For the 2019/20 year, this stands at £166 a week. As an apprentice, it’s likely that you’ll have to pay Class 1 National Insurance, which is charged at 12 per cent of your earnings between £166 and £962 per week. Earnings above £962 will be charged an extra two per cent in National Insurance contributions.

What can an apprentice claim on tax?

You might be wondering if you’ll be able to claim tax relief on expenses you incur in connection with your apprenticeship. It’s important to note that the only instances in which you may be eligible to make a claim are if you use your own money to buy things that you need for your role and if you only use these things for your role. You can’t claim tax relief if your employer gives you all the money back or offers you an alternative.

There are strict eligibility criteria in place concerning these claims. To find out more about them, it’s best to visit the GOV.UK website.

Having a clear understanding of the pay and tax rules that are in place for apprenticeships will help ensure you know what to expect in terms of your finances when you start one of these training programmes, so it’s well worth doing your research.

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