Under-18 Employment Tax and National Insurance: What Young Workers Pay 2026

One of the most persistent myths in UK personal finance is that young people -- particularly students or those under 18 -- are somehow exempt from Income Tax or National Insurance. They are not. HMRC applies the same thresholds and rates regardless of age. Understanding exactly what young workers owe protects them from underpayment penalties and ensures they reclaim any tax they have overpaid.

Income Tax for Under-18s: The Same Rules Apply

Age does not change your Income Tax position in the UK. HMRC treats a 16-year-old weekend worker exactly the same as a 40-year-old employee for Income Tax purposes.

Personal Allowance

Every UK resident is entitled to a Personal Allowance of £12,570 for 2026/27 (if their income is below £100,000). This means the first £12,570 of earnings each tax year is free from Income Tax.

For most under-18s working part-time, total annual earnings will fall below this threshold. A young person working 10 hours per week at £8.00 per hour earns approximately £4,160 per year -- well below the Personal Allowance.

When Under-18s Do Owe Income Tax

If an under-18 earns more than £12,570 in a tax year -- for example through a full-time job in school holidays combined with part-time work during term, or through freelance income alongside employment -- they owe Income Tax at 20% on the excess.

There is no special rate for under-18s. A teenager working full-time on a gap year who earns £20,000 would owe approximately £1,486 in Income Tax.

National Insurance for Under-18s

Employee National Insurance Contributions (NICs) begin at age 16, once weekly earnings exceed the Primary Threshold.

Thresholds and Rates for 2026/27

• Earnings between £123 and £242 per week: no NICs due, but earns NI credits
• Earnings between £242 and £967 per week: 8% NICs
• Earnings above £967 per week: 2% NICs

These are identical to adult employee NIC rates. An under-18 earning £250 per week pays 8% on £8 (the excess over £242), which is 64p per week -- but as earnings rise, the charge becomes significant.

Under-16s and NI

Children under 16 do not pay National Insurance. This is the only genuine age-based NI exemption. The moment a worker turns 16, they enter the NIC system on exactly the same basis as any other employee.

Employer National Insurance on Young Workers

Employers also pay NICs on behalf of employees. For 2026/27:

• Employer NI: 15% on earnings above the Secondary Threshold of £5,000 per year (£96.15 per week)
• Employment Allowance: Eligible employers can deduct up to £10,500 from their employer NI bill per tax year

There is no employer NI exemption for employing under-18s. The same 15% rate applies. However, the Employment Allowance significantly reduces the NI cost for smaller employers.

Apprentices Under 25

There is one exception: employers pay zero employer NI on earnings up to the Upper Secondary Threshold (£50,270) for:

• Apprentices under 25
• Employees under 21

This exemption applies to the employer only -- the employee still pays their 8%/2% NICs as normal. It is a deliberate policy to reduce the cost of hiring young workers and apprentices.

The National Minimum Wage for Under-18s

National Minimum Wage rates from April 2026:

Under-18s who are still of compulsory school age (below 16 in England) are not entitled to the National Minimum Wage. Compulsory school age ends on the last Friday of June in the academic year a young person turns 16.

Once an under-18 is no longer in compulsory education, they are entitled to the under-18 NMW rate of £8.00 per hour for all hours worked, including weekends and school holidays.

Apprentice Rate

Apprentices under 19, or those in the first year of any apprenticeship regardless of age, receive the apprentice rate of £8.00 per hour. After completing the first year and turning 19, the apprentice becomes entitled to the relevant age-band NMW rate.

PAYE and Tax Codes for Young Workers

Employers operate PAYE (Pay As You Earn) and apply a tax code to determine how much Income Tax to deduct. For under-18s starting their first job:

• If you give your employer a starter checklist and confirm this is your only job, you should receive tax code 1257L, which gives you the full £12,570 Personal Allowance
• If you have multiple jobs, each employer may only apply a portion of the Personal Allowance, or an emergency code may be used

Reclaiming Overpaid Tax

If you worked part of a tax year and your employer deducted too much Income Tax (for example because PAYE was applied before your full Personal Allowance was available), you can reclaim the overpayment by:

• Completing a Self Assessment tax return
• Using HMRC's online repayment tool (for straightforward cases)
• Calling HMRC's helpline

Young workers often leave overpaid tax with HMRC simply because they do not know it exists. Check your P60 (issued by your employer after each tax year) against your total earnings to see if a repayment is due.

Self-Employed Under-18s

Under-18s can be self-employed. The same Income Tax rules apply: self-employed profits are taxed after the Personal Allowance. On the NI side:

• Class 2 NICs (flat rate of £3.45 per week) apply once annual profits exceed the Small Profits Threshold of £12,570
• Class 4 NICs apply at 6% on profits between £12,570 and £50,270, and 2% above

Class 4 NICs do not count towards State Pension entitlement (Class 2 does). Self-employed under-18s register for Self Assessment through HMRC and file a tax return by 31 January following the end of the tax year.

Council Tax Disregard for Under-18s

Under-18s are completely disregarded for council tax. This means:

• They are not counted as residents when determining how many adults occupy a property
• If a property would qualify for a 25% single-person discount because of one adult, an under-18 in the household does not remove that discount
• Properties occupied only by under-18s are generally exempt from council tax entirely

This is particularly relevant for households where a young carer or young person lives with parents who are away for extended periods, or for student households where some members are under 18.

Student Earnings During Term Time

There is no special term-time exemption from Income Tax or NI. A student under 18 working in a supermarket on Saturdays is assessed on the same basis as any other worker. The only protection is the Personal Allowance of £12,570, which most part-time students will not exceed in a full tax year.

Students should ensure their employer is using the correct tax code (1257L for a single job) and not deducting Income Tax unnecessarily when annual earnings will clearly remain below the Personal Allowance.

The Bottom Line

Under-18s are not exempt from UK Income Tax or National Insurance. The same Personal Allowance of £12,570 and rates of 20%/40% for Income Tax, and 8%/2% for employee NI, apply from age 16 (for NI) and from the first pound earned above the Personal Allowance (for Income Tax). The minimum wage for under-18s not in compulsory education is £8.00 per hour. Check your tax code when you start a new job, keep an eye on your total annual earnings, and claim any overpaid tax promptly.