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How are interns treated for tax?

Updated on 12 April 2023

Students

There are very many different kinds of internship available. You will need to look at the agreement you have with the provider of the internship to see what your status is. You may be employed or be a volunteer, undertaking unpaid work.

In this part of the website we treat interns who are providing services on a voluntary basis separately from those who are being paid.

Illustration of an intern and an employee

I am an intern – am I entitled to the National Minimum Wage?

The first thing you need to establish is the precise nature of your working agreement.

If you are employed or are a worker, then in most cases your employer has to pay you in accordance with National Minimum Wage (NMW) legislation, which includes the National Living Wage (NLW). You may be paid more than this, but this is the basic minimum.

If, instead, you are taking part in a government scheme to provide training and work experience, or are doing voluntary work for a charity, it is likely you will not be entitled to the NMW nor the NLW.

There are specific types of student internships where, as part of your course of UK-based higher or further education, you are required to undertake an internship of less than a year: in these cases you are not entitled to the NMW nor the NLW.

In a similar way, work experience students who are under the compulsory school age (usually 16 years) are not entitled to the NMW.

If you are not being paid for your work, you may find it helpful to look at our page on volunteers.

Example 1

I work for a charity each week providing counselling services. I hope this will help me find a job in that sector when I graduate. I have signed an agreement saying I will try to provide them with a certain number of hours each month. Should I be paid for this?

It sounds like you are doing voluntary work and would not be entitled to the NMW nor the NLW.

Example 2

I promote a local nightclub by handing out leaflets. I do not get paid, but instead I am able to get free entry to the nightclub for myself and a few friends. Should I be paid for this?

You need to look at any agreement you have with the nightclub. It sounds like you may have a case for claiming the NMW or the NLW depending on your age.

Note that the above examples are very general and your situation will depend on your individual circumstances. There is more information on when volunteers may be ‘workers’ and due the NMW in the HMRC NMW manual. You might be able to get help from the Acas helpline if you are not sure whether you should be paid the NMW.

How are expenses paid to interns taxed?

This section is for interns who are being paid for their work.

If, instead, you are being paid expenses for voluntary work that you do, look at the page for volunteers.

As a paid worker, you are in the same position as other employees. Broadly, any expenses paid to you by your employer are potentially taxable. You are able, though, to claim a deduction for tax purposes for any expenses that are ‘necessarily’ spent by you in the performance of your duties. So if your employer only reimburses you for actual expenses that you necessarily incurred, it is unlikely a tax liability will arise on these expenses.

⚠️ Note that home to work travel expenses are usually not tax deductible.

Where can I get more help?

Further information on the subject of expenses is available in our Employment section.

Related to this:

What is the National Minimum Wage

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