Do Apprentices Have to Pay Tax? Everything You Need to Know

Are you looking to start an apprenticeship?

Apprenticeships and regular employment might sound different, but they have more similarities than you think. Although you’re technically in education, you’re also in full time employment, which can be a grey area in terms of apprenticeships and tax.

Apprentices pay regular tax just like everyone else, but there are so many nuances to cover - we’ve got it all covered in this blog for you!

Do apprentices have to pay income tax?

The general rule is that apprentices are considered employees, meaning they’re subject to tax, just like any other worker.

Income tax is based on your earnings. For most people in the 2024/2025 tax year, the personal allowance (the amount you can earn tax-free) is £12,570. If you earn above this threshold, you’ll need to pay income tax.

This tax is deducted automatically through PAYE (Pay As You Earn) by your employer.

Example:

If your annual income is £14,000 as an apprentice, you’ll pay tax on the amount over the Personal Allowance (£14,000 - £12,570 = £1,430). Income tax will be applied only to that £1,430. If you’re doing an apprenticeship with a higher pay, you’ll be taxed more.

The basic tax rate is 20%. You can be taxed more depending on how much you make above £50,270, however, apprenticeships don’t usually go over this limit so there’s no need to worry about it!

Do apprentices have to pay national insurance?

Yes, apprentices also need to pay National Insurance Contributions (NICs), provided their earnings exceed a certain threshold.

Current thresholds for national insurance:

• You start paying Class 1 NICs if you earn more than £12,570 a year or £242 a week in 2024/2025.

Like income tax, NICs are also deducted through PAYE by your employer and help fund state benefits, like pensions and healthcare.

Example scenarios:

• If you earn £10,000 annually, you won’t need to pay National Insurance because it’s below the threshold.
• If you earn £15,000, you will start paying NICs on the amount over the threshold. This would equate to £20.25 National Insurance Tax per month.

Do part time apprentices pay tax?

Whether part-time apprentices pay tax depends on how much they earn. If your earnings remain below the Personal Allowance threshold (£12,570), you won’t need to pay income tax.

Similarly, if your weekly earnings stay below £242, you won’t have to pay National Insurance.

Read more: Your Apprenticeship Questions Asked and Answered

Do apprentices pay council tax?

Apprentices may be eligible for a council tax exemption or discount, depending on their income and circumstances. To qualify for an exemption, you need a declaration from your employer, stating that:

• You are paid no more than £195 a week.
• Your apprenticeship leads to a qualification that is accredited.

If you meet these conditions, you won’t be counted as an adult for council tax purposes, meaning you could qualify for a discount or exemption.

Do under 18 apprentices pay tax?

Yes, under-18 apprentices are subject to the same tax rules as other apprentices. The same income tax and National Insurance thresholds apply, so if you earn above these limits, you’ll need to pay tax.

Read more: Can You Do an Apprenticeship at Any Age?

Can an apprentice claim working tax credits?

In some cases, apprentices can claim Working Tax Credits (WTC). According to HMRC, your apprenticeship counts as remunerative work for WTC purposes if:

You have a contract of employment for your apprenticeship.

Your payment is classed as earnings and subject to income tax and National Insurance contributions.

If you only receive non-taxable training allowances or expenses, your apprenticeship won’t qualify as remunerative work for WTC.

Can apprentices claim benefits?

Apprentices may be able to claim certain benefits, depending on personal circumstances like age and income. Universal Credit is the main benefit for apprentices, but to be eligible, you must:

• Be on a recognised apprenticeship.
• Have a named training provider.
• Be working towards a recognised qualification.
• Earn at least the National Minimum Wage for an apprentice.

Most people under 18 will not be able to claim benefits, but if you’re aged 16-18, on a low income, or meet specific eligibility criteria, you may still be able to apply for Universal Credit.

What can apprentices claim on tax?

Apprentices can potentially claim back on certain tax-deductible expenses, such as:

• Travel expenses, if commuting to work or training locations.
• Uniform costs, if specific clothing is required for the role.
• Tools and equipment needed for your apprenticeship.

Want to start your apprenticeship journey? Explore our vacancies or contact us today!