Students need all the money they can get their hands on - and one of the easiest ways is not to overpay tax. Students as a group do not have preferential treatment within the tax system, but not all their income is taxable. BBC News Online offers some guidance on the rules.

Do I pay tax on all my income?

No. Everyone has a tax-free personal allowance.

This means during the current year (2002-03), you can earn up to �4,615 without being taxed.

Beyond this amount, you will be taxed at 10% up to �6,535; 22% to �34,515; and at 40% on earnings over �34,515.

Are student loans taxable?

No. Student loans along with a number of other forms of support are not taxable.

The following are not taxable:

• Student loans and grants
• Contributions from your parents
• Most scholarships
• Most research awards
• Housing benefit
• Most gifts and loans from relatives
• Income from Individual Savings Accounts (ISAs)
• Prizes won by students for academic excellence.

What is taxable?

The most common forms of taxable income are earnings from full or part-time work, including tips and bonuses, and any income from self-employment.

If you receive dividends from shares in a company, Jobseeker's allowance (JSA) or interest from most National Savings accounts, they are all taxable.

Interest from savings with a bank or building society is taxable, unless your total taxable income in the year is below the �4,615 threshold.

Have I paid too much tax?

You may find that you have paid too much tax - maybe because you didn't understand the rules.

For example, if you have paid tax during the year, but you have earned less than the personal allowance of �4,615.

If your income for the same tax year is likely to remain below your personal allowance, you can claim back tax during that tax year.

If you think you have paid too much tax ask the Inland Revenue for a repayment claim form.

You can contact the Revenue's inquiry line on 020 7667 4001 - open Monday to Friday 0830 to 1700.

Alternatively, if you wish to see someone in person, you can search for your nearest Revenue office under the "Contact us" section on its website (see link on right).

What happens when I start my first job?

When you start work for the first time, your employer should give you a form P46 to complete.

This will mean you receive your wages under "Pay As You Earn" (PAYE) - and your employer will take into consideration your tax-free personal allowance and should tax you correctly.

Your employer will send this to the Inland Revenue after your first payday to check your employer's calculations.

The Revenue might send you form P91 to complete to ensure that you pay the right amount of tax.

What if I've worked before?

If you have worked before or claimed Jobseekers allowance, you should have a P45 from your last job or when you stopped claming.

Hand this to your new employer; otherwise you will be taxed at 22% on all your income.

If you do not have a P45, get a P46 off your new employer.

I've paid too much tax. How do I claim it back?

If you think you have paid too much tax during any one tax year, you should try to claim a refund.

Contact the Inland Revenue to get a claim form.

You can contact the Revenue's inquiry line on 020 7667 4001.

Alternatively, if you wish to see someone in person, you can search for your nearest Revenue office under the "Contact us" section on its website (see link on right).

What happens if I'm only planning on working in the holidays?

Students who work during holidays and do not expect to earn more than their tax-free personal allowance (�4,615 for 2002/2003) should ask their employer to complete form P38(S) which means their wages will be paid gross.

This does not apply to evening or part-time work outside normal holiday times, when students are required to complete form P46.

Students may however have to complete a tax return at the end of every tax year to ensure that their total taxable income has not exceeded their personal allowance.

Do I pay National Insurance contributions?

Most students are not required to pay National Insurance contributions.

However, every person who has an employer and whose earnings exceed the primary threshold of �89 per week must pay Class 1 (earnings-related) contributions.

These are deducted from wages/salaries by the employer. The rate of contributions depends on total earnings.

No contributions are payable under the age of 16 or over pension able age.

The Inland Revenue National Insurance Contributions Office (NICO) keeps the records for everyone's contributions throughout their working life.

Where can I get further information?

If you need further information, leaflet IR60 on the Inland Revenue's website has more information on income tax and students.

To find out current National Insurance contributions and Social Security benefit rates, see leaflet GL 23 Social Security benefit rates.