Do College Employees Pay Taxes?

It is a common occurrence to find students who decide to work while they are in pursuit of a degree or a professional certificate. Understanding the benefits that working while pursuing a degree offers may help you make an informed decision about whether it would be profitable for you to work and earn a degree simultaneously. In this article we shall see Do College Employees Pay Taxes?

College employees are not exempt from the payment of taxes. This is because their earnings are still subject to both federal and state income taxes. However, some students might be exempt from paying Medicare and Social Security (FICA) taxes. Students who qualify for this exemption include half-time undergraduate or graduate students who are not considered a career, professional or full-time employees. The exemption only covers wages earned by student employees during a term whereby the student was enrolled.

Do College Employees Pay Taxes?

Special Considerations

Generally, FICA tax applies to the wages an employee receives as a consequence of employment. However, there’s an exception for those in the employ of some private or public non-profit, colleges, universities, or organizations that might bear affiliations with these educational institutions. The Internal Revenue Code (IRC) Section 3121 (b (10) has excepted tax for a student (one who is currently enrolled and attends classes regularly) who is also an employee of a school, college or university, or any organization and, who performs a service and that service has been organized or has been exclusively operated to benefit that institution. Guidelines have also been put in place to properly define whether an individual can be classified as a student at a higher education institution. 

There are some benefits associated with being a college employee.

Benefits that Can Be Gained from Being A College Employee

There are different reasons why students may look for employment while they are in school. There are nonetheless, benefits associated with working in college

  1. Covering of expenses: Over time, the money that you have earned as part of your paycheck can add up and this money can be used to pay off debts such as student loans. Students can also learn financial literacy as they take actions such as budget creation and proper management of money. Other expenses may also be attended to. This may include the costs of books, accommodation, or other expenses associated with student life.
  2. An opportunity to network: Workplaces are great places to seek opportunities to network with people who might help one on the path to a great career. Networking is important as it allows students to interact with each other and develop relationships that could help them in the future. Students who are employees have the chance to showcase their skills which could attract the attention of colleagues and managers. This implies that as students grow their network, these professionals who are already aware of the student’s skills and abilities can utilize them or recommend them to other professionals for positions that benefit their skills.
  3. It can help in gaining important professional experience: Working while attending school can help you gain valuable professional experience. Seeking a job or internship that is relevant to your major or the industry you plan to pursue, can grant you experience that can aid you train for your long-term career.
  4. Development of transferrable skills: Although some college students engage in internships that are related to their chosen field, others may work in different fields altogether. These kinds of jobs can help students gain skills that are considered transferrable to other spheres of life. Seeking employment in areas related to your academic path can arm you with skills and abilities relevant to that field but skills can also be acquired from non-industry positions. These skills include leadership, verbal communication, teamwork and collaboration, and time management
  5. Showcasing your desired ambition: Most employers value hardworking and dedicated individuals. So, earning a salary while still in college shows how ambitious you are in striving for your goals. The ability to balance several responsibilities and priorities shows that you are organized and can handle more than one task at a time.
  6. Money management: Working as a student can help you budget and develop a positive attitude towards money. Earning money yourself can help you budget for emergencies. It can also assist you in practicing everyday payments for everyday expenses such as rent and groceries which can provide you with experience handling money before you commit to a full-time job.
  7. Grade improvement: Some researchers believe that having a job on-campus may positively impact your grades. Being involved in activities on campus can help you learn time management. This means setting timetables and schedules to help you manage time efficiently. This can invariably lead to better academic performance. While it may seem like holding down a job and attending college might negatively impact your grades, balancing these responsibilities can help you develop strategies that might help you devote enough time to each responsibility. 
  8. Application of classroom knowledge: When you gain employment in a field related to your chosen course, you can apply information garnered from the classroom and apply them to your employment space. This helps improve two things; your performance in your job and your performance in your academics due to regular application of gotten knowledge.


Working while you are still a student at college helps cover not just the cost of tuition but other necessary expenses such as groceries and leisure spending. Going to college is a daunting task on its own, but it doesn’t account for bills payment and work experience. Supplementing your college education with an internship or part-time job can help not just take care of expenses but also improve your time management and money management skills.

Frequently Asked Questions

  1. If I don’t have a job, does it imply that I have no income? Not really. Income can be used to mean different things. Asides from a job, other ventures might help you generate income such as gains or losses of capital from investments, dividends, or interests.
  2. Do taxes need to be paid on scholarships or grants? Not really. Scholarships are generally not taxable to the recipient since they pay for tuition, fees, equipment, supplies, or books. However, if there is excess after the costs of tuition, books, and equipment have been removed, the residual cash can be taxable.
  3. Are prizes won in a contest taxable? All prizes and awards are generally taxable. This holds no matter the form the prize may come in.
  4. What is the due date for income tax returns? Income tax returns should be made by April 15 of the next tax calendar year. If the 15th falls on a weekend, the tax return becomes due on the first business day after the 15th.