Last updated: 16 October 2026
How are payments for work experience taxed?
It depends on whether the person is a worker. If someone on work experience does real work, has set hours and duties, and is promised payment or future work, they are usually a “worker” and must be paid at least the National Minimum Wage, run through payroll like any other employee. Genuine work shadowing, where the person only observes, doesn’t need to be paid. Students on a required placement of up to one year as part of a UK further or higher education course are also exempt from the minimum wage. Reimbursing genuine travel and lunch expenses is not treated as wages.
Who must be paid?
| Placement type | Minimum wage? |
| Work shadowing only | No |
| School pupils under compulsory school age | No |
| Required placement on a UK course (up to 1 year) | No |
| Voluntary worker for a charity | No, if only expenses are paid |
| Intern doing real work | Yes |
| Graduate “unpaid internship” with set duties | Yes |
2026/27 minimum wage rates
- 21 and over: £12.71 an hour
- 18 to 20: £10.85
- Under 18 and apprentices: £8.00
Payroll treatment
If a paid placement counts as employment, add the person to payroll, send an FPS on or before payday and deduct tax and National Insurance where earnings are high enough. Most short placements fall below the personal allowance, so a student who completes the starter checklist (statement A) on a 1257L tax code pays no tax. Employer NIC applies above the secondary threshold of £5,000 a year, but employers don’t pay employer NIC on earnings below £50,270 for employees under 21.
Expenses
Reimbursing travel, meals and accommodation costs genuinely incurred during unpaid work experience isn’t taxable and doesn’t make the person a worker. Flat-rate “expenses” that exceed actual costs are treated as pay.
Example
A design agency takes on a 22-year-old graduate for 8 weeks, working 35 hours a week on client briefs. This is real work, so the agency pays £12.71 an hour, or £444.85 a week. It puts the intern on payroll, with employer NIC due on pay over £96 a week.
Common mistakes
- Calling paid work “volunteering”
- Paying a flat sum below the minimum wage
- Not putting paid interns on payroll
- Paying expenses that are actually allowances
Records to keep
Keep the placement agreement, hours worked, pay records and expense receipts.
Checking whether a placement is work
Ask whether the person has to turn up at set times, has their own tasks, would be missed if absent, and has been promised payment or a job. If the answer to most of these is yes, treat them as a worker. A written placement plan setting out what the person will observe and learn helps show genuine shadowing where that is the case.
Frequently asked questions
Can I pay in vouchers?
Vouchers count as pay through payroll and don’t count towards the minimum wage.
Do interns get holiday pay?
Yes, if they’re workers.
Do they need a pension?
Auto-enrolment applies once earnings exceed £10,000 a year and they’re aged 22 or over and under State Pension age. The DWP kept this trigger unchanged for 2026/27.
Can I take on overseas students?
Check their visa allows work.
Penalties for underpaying
Employers who underpay the minimum wage must pay arrears and can face penalties of up to 200% of the arrears, and being named publicly.
Related: casual workers on payroll, summer jobs for under 18s and minimum wage rules.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with work experience pay advice. See our payroll accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
