Are you a parent who finds it hard to tell if the number at the bottom of your teenager's mobile phone bill is the amount that needs to be paid or the number you are supposed to dial to get hold of him or her? Are you a parent who spends more on their pizzas than you save in your own pension? If so, it is probably time for your spendthrift son or daughter to learn the value of money and get a job.

Starting to work for financial reward early in life teaches a child many valuable lessons. These include discipline and timekeeping (which may not always be obvious at school), but most importantly, it also teaches that there is a direct relationship between buying the things that you want and the time and effort it takes to earn the money to pay for them. In short, that money does not grow on trees.

Moreover, if a child can be persuaded not to splash out all his or her wages on payday, a job teaches the wisdom of saving. Choosing a savings account, and working out how much interest it will pay, provides a real-life exercise in the number skills that children are supposed to pick up in their maths classes.

Finding a suitable job, however, is not always that easy. The days of sending children up chimneys to earn their keep are over, and there are plenty of rules about what children can and can't do.

Government statistics show that most school-age children do some part-time work before they leave education. Of an estimated population of 3.5 million 11 to 15-year-olds, about 2.3 million will have worked at some stage. Most of them will do newspaper rounds, but many work in shops and restaurants, on farms and in offices.

The framework for the protection of young workers is the Children and Young Persons Act 1933, but these rules are supplemented by local authority bylaws, which can vary from one area to another. In most cases the youngest age at which a child can work is 14. The two main exceptions are child actors and models, if they obtain a special permit from the local authority.

Some local authorities allow 13-year-olds to work in a restricted range of jobs, such as delivering newspapers, serving in shops, working in hairdressing salons, offices, riding stables and cafés, though not their kitchens. A young person can also work on a market stall at 14, but only if the stall belongs to a parent.

The law states that children of school age should do only “light work”. Children are barred from working in cinemas, theatres, nightclubs and betting shops. They are not allowed to sell door-to-door, or on the telephone. Nor can they undertaking the personal care of residents of care homes. They are also barred from dangerous industries, such as manufacturing, demolition, building and transport. They must generally be 18 to work in a bar.

The rules about the hours that children and young people can work are strict and complicated.

Children under the school-leaving age may not work during school hours (9.30am to 4.30pm Monday to Friday, including the lunch break); they may not work before 7am or after 7pm; they may not work for more than two hours on a school weekday, or for more than one hour before school starts; they may not work for more than two hours on any Sunday, or for more than eight hours a day during the school holidays or on Saturdays. This limit is reduced to five hours if they are under 15.

If they work for more than four hours a day, children are entitled to one hour's break. They may not work for more than 12 hours in any week during which they are required to attend school.

During the holidays they may not work for more than 35 hours a week, or 25 hours if they are under 15. If they do work during the holidays, they should have at least a two-week break from work within the holiday period, although they are not entitled to paid holiday. Those aged 16 to 18 are entitled to paid holidays pro-rata, according to how often they work.

Anyone employing a child must obtain a permit for each child employee from their local authority.

Statistics show that the law is ignored widely. A recent survey in Norfolk found that one in 20 firms was employing school-age children illegally. Surrey County Council has prosecuted 27 companies over the past six years, including household names such as McDonalds, Tesco, Sainsbury's, Whitbread and Woolworths, for breaking the rules.

While it is the rogue employers who risk prosecution, and not the child, any parent would want to ensure that his or her child is not being exploited, being put at risk by working in unsafe conditions or simply breaking the law. To protect children's health and safety, employers must have regular risk assessments carried out. If you are in any doubt about your child's safety, check that this has been done.

Then there is the matter of tax. People are often surprised to learn that British residents are liable for income tax as soon as they are born. However, they only have to pay anything if their earnings and interest on savings exceeds the personal tax allowance (£5,225 a year, or £100.48 a week, for 2007-08). This is unlikely in the case of most children, as jobs for young people tend to be low-paid.

While there is no minimum wage for under-16s, those older than school leaving age - reached at the end of summer term of the school year in which the child turns 16 - and under 18 must receive at least £3.40 an hour. Workers aged 18 to 21 are entitled at least £4.60 an hour, while those aged 22 and over receive the full rate, currently £5.52 an hour.

Unlike the situation with tax, under-16s do not have to pay national insurance (NI), however much they earn. But once children turn 16, they become liable for contributions. There is no need to panic, as they do not have to pay anything until their earnings exceed £100 a week. If earnings are uneven (say £150 in each of two weeks, then nothing for the next two), it can be worth arranging to be paid monthly - if the child can wait that long for the money. By averaging out the weekly sum, this could keep pay below the NI threshold. Unlike income tax, NI is not refundable unless it has been deducted in error.

Once the money starts to roll in, your child will want to open a savings account. Check out the best-buy tables at Moneyfacts.co.uk, the financial information website, to see which pays the best rate for your needs, such as instant access or long-term saving. Once a child turns 16, he or she can open a cash mini-Isa, in which they can save £3,000 a year tax-free (£3,600 from April).

Children under 16, and anyone else whose combined earnings, investment income and savings interest does not exceed the personal allowance of £5,225 a year (£5,435 from April), should register to have the interest on their savings paid gross. They can do this by filling out form R85, available from the bank or building society that holds the account.

CASE STUDY: Enjoying a little independence

Hannah Pearce, a pupil at Taverham High School in Norwich, has a Saturday job working in the refectory at Norwich Cathedral. The 15-year-old, left, is paid £3.35 an hour and earns about £17 a week during term time.

“I wanted to be independent and not always have to ask my parents for things all the time,” she says. “I first earned some pocket money by helping to mark papers at an after-school maths class, but now I have a proper job.”

Hannah particularly likes her present job because she can earn more during the school holidays, when she can work extra hours. She puts the money she earns in a Norwich & Peterborough HeadStart account.

“I'm not saving for anything in particular,” she says, “but after my dad was made redundant and was out of work for nine months, I thought that I should make some sort of contribution to the family finances.”

Babysitting essentials

There is no minimum age for being a babysitter, whether the sitter is paid or not. Nor is there any legal restriction on the age of the child that a person can sit for.

However, if the child is thought to be at risk because supervision has been inadequate, criminal charges could be brought against the child's parents, or care proceedings could be brought to protect the child. The Royal Society for the Prevention of Accidents (Rospa) and the NSPCC both recommend that no one under 16 looks after a baby.

Wages for babysitters average between £5 and £8 an hour, according to Mumsnet.com, the parenting forum. If babysitters finish late at night or live far away, parents will often pay for a cab home.