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Date:
May 12, 2025
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How much tax do you pay on a second job?
Working a second job means extra money. People have different reasons to work two jobs. You might be saving for an event, you may want to start your business or you just want to increase your savings. In any case you need to know the tax on a second job. This is determined by many factors such as the type of the second job, income from the second job, etc.
Here is a detailed guide to know how much tax do you pay on a second job.
Input of employers on second job
While taking a second job, you need to check your contract for the first job beforehand since it might not allow you a second job. This contract is a signed document that you might have received when joining. Contact the HR department for details or to clarify sections.
Employers might not allow second jobs in two cases:
- Working for a company that is in competition with the first one
- It’s possible that your second employment will damage your employer’s reputation.
If there is no clause, then you can take a second job and your employer is not able to stop you. You then pay the right amount of tax on a second job.
Rights while working second job
Your rights remain the same regardless of which job you are working. Some of your protected rights are:
Contract
You should get a contract for a second job which should contain all the important information including title, duties, pay, benefits, etc.
Wages
In the UK, workers should get at least the National Minimum Wage so if you are over 21 years of age or over, you should receive this amount or more. This year the National Minimum Wage for each age group is as follows:
Work Time
By law, you should work at most 48 hours a week. However, you can choose to work more than this, especially, when you take a second job, you might work more than this.
While explaining the dynamics of second job holding in Britain, Taylor and Boheim state;
“In the medium-term,workers who wish to work more hours can either renegotiate the employment con-tract or change employers to supply their preferred number of hours.”
Mark P. Taylor et al.
Second jobs’ tax codes
While finding tax on second jobs, you need to know tax codes. Following are the tax codes that might apply on your second job and determine your tax amount.
Having BR tax code on your pay slip means that you cannot get personal allowance on your second job.
Learn more about the BR tax code here.
Income tax on a second job
Tax on a second job depends on how personal allowance, for now £12,570, is applied which is the earning on which no income tax applies. Here is how HMRC tax on a second job is applied to different scenarios while incorporating personal allowance.
Case 1: One job above the personal allowance
Say you have two jobs, the first of which pays £15000 and the second one £5000. Your personal allowance is applied on the first one. HMRC tax on second jobs and the tax on the amount of your pay more than £12,570, is a basic rate which is 20%.
Case 2: Both jobs below personal allowance
Now you have two jobs each of which pays £10000. Both of these are below personal allowance so it can be divided on both. You can contact HMRC and ask them to divide it among both. You can also ask for a refund at the end of the year.
So, your income tax on a second job won’t be at a basic rate.
Case 3: Earnings exceed £50000
If the earnings of both your jobs sum up over £50000, you cannot apply the personal allowance on one job. In this case, tax on a second job is more than the basic rate. You have to report to HMRC, else, you’ll be underpaying tax.
Informing HMRC of your second job
Tax on a second job in the UK depends upon the type of job. HMRC should be informed of your second job regardless of its nature. Else, you might be paying less or more tax than you are owed. You can check your tax code updates paperless-ly, on their app or online.
Regular Second Job
Your employer will give HMRC your income details in this case which will help them in determining your tax code. You’ll be taxed accordingly and pay tax on a second job. What you need to do is:
- Provide your employer with P45
- Give them starter checklist if you cannot share P45 in any case
File your taxes accurately using our Corporation Tax Return Preparation & Submission to HMRC services.
Other Cases
These include
- Contractors
- Free lancers
- Traders (sole)
In these cases, tax on a second job is calculated through Self Assessment.
Requirements:
Here are the requirements for starting application for tax in these positions
- Tax code by HMRC
- Bank statement backed receipts and invoices
After meeting these, fill your self assessment returns.
Tax on a second job is then applied according to income you are making from it.
Effect of second job on different aspects
Apart from HMRC tax on second jobs, here are a few fiscal aspects affected by second jobs.
Insurance Contributions:
On exceeding the limit of £242 per week, you need to pay National Insurance Contributions. If both jobs are over this limit, you have to pay on both. You don’t have to pay for any if your income is between lower income limit and the PT.
Loan Repayments:
If you owe any student loans, they’ll be deducted from your total income of two jobs. You need to keep track of this decrement to avoid over or underpayments.
Pensions
Having two jobs can make you capable of more money aside for pensions. By law, there is no limit on how many pensions a person can have. Thus, you can avail relief on both types of jobs by paying in pensions. You just have to be aware of annual allowance for pensions i.e., £60,000 or 100% of your income per year (whichever is lower). This limit is applied over the entirety of your pensions.
Contact Sterling Cooper Limited for expert advice
Calculating tax amounts on both jobs can be hard. For a hassle free experience, contact Sterling Cooper Limited. We will provide you a smooth experience on calculating and registering for tax on a second job.
Need help with tax on jobs, contact us now.
Need Help Navigating Tax on a Second Job?
Sterling Cooper Limited provides expert tax consultation to ensure you don’t overpay or miss critical reporting deadlines.
FAQs
Yes, it is completely legal. If the contract does not stop you, you are free to do so.
Having a second job affects tax credits. While claiming Universal Credit and not getting work allowance, for every £1 you earn, your payment goes down by 55p.
Yes. You have to register with them through self assessment via the Government Gateway Platform.
It means basic rate. It is set at 20%.
You can change them using HMRC online services or their app. Update or fill in employer details. Inform if employment has ended. You can also change pension, benefits, etc.
Get help from accountants or accounting firms. They’ll help you in calculating accurate amounts hassle-free.
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