Employing students – make sure you comply Employers use student workers as a form of temporary labour supply to cover for regular staff holidays or other ad hoc tasks during the summer holidays. If Form P38 (S) is completed and signed by the student then no income tax need be deducted, even if the student’s pay exceeds the PAYE threshold for any relevant pay period. The Form P38 (S) procedure should not be considered for students working: on a part-time basis outside of normal holiday periods; or both during and outside of normal holiday periods. Employers reimbursing expenses and providing benefits, such as home to work travel or gifts and vouchers must apply the tax rules to students in the same way as any other employee. Form P38 (S) only applies only to tax; National Insurance Contributions (NICs) are deducted in the normal way. The Employment Equality (Age) Regulations 2006, effective 1 October 2006, do not alter the fact that NICs are not payable by or in respect of anyone under 16. However, references to age as a condition of entitlement to statutory payments, such as being under 16 were removed. The National Minimum Wage applies to workers below 18 who are no longer of compulsory school age, with apprentices aged 16 and 17 excepted, with the rate currently set at £3.30 per hour. In England and Wales, a child may leave school on the last Friday in June in the school year in which the child reaches the age of 16. The Children (Protection at Work) Regulations 1998 place restrictions on the amount of work and type of work undertaken by children of school age. Students have a statutory right to accrue holiday from their first day of work and receive payment in lieu when the employment ends, where holiday entitlement has not been fully taken.orm P60 to each employee who was employed on 5th April 2007. Paul Tew, Pay Magazine Snowdrop provides a range of Payroll solutions that are fast, flexible and easy-to-use, to suit the many and varied needs of each organisation. To find out more about the software and services that we provide, please click here >>