Tax on Second Jobs
A complete guide to understanding how tax and National Insurance work when you have multiple jobs, and how to make sure you're paying the right amount.
Whether you're working two part-time jobs, have a side hustle alongside your main employment, or are juggling multiple sources of employment income, understanding how tax works with multiple jobs is crucial. The good news is that the system is designed to collect the right amount of tax overall - but understanding how it works will help you avoid surprises and spot if you're paying too much.
The Key Principle: One Allowance, Multiple Jobs
You only get ONE personal allowance
No matter how many jobs you have, you only get one personal allowance of £12,570 per year. This is the amount you can earn tax-free across ALL your jobs combined.
- • Your first job uses your personal allowance (usually)
- • Your second job typically pays tax from the first pound
- • Your total tax across all jobs should equal what you'd pay if you earned it all in one job
- • At the end of the tax year, HMRC reconciles everything to make sure you've paid the right amount
The Simple Truth:
Having two jobs doesn't mean you pay more tax overall. You pay tax on your total income, just like you would if you earned the same amount in one job. The only difference is how the tax is collected across your different employers.
Understanding Tax Codes for Multiple Jobs
When you have multiple jobs, each job will have a different tax code telling your employer how much tax to deduct. Here's how it typically works:
Your main job (usually the one that pays the most) typically gets the standard tax code 1257L for 2025-2026. This gives you the full personal allowance of £12,570.
The code 1257L means you can earn £12,570 tax-free from this job. You only pay tax on earnings above this amount.
Your second job typically gets a BR (Basic Rate) tax code. This means you pay 20% tax on every pound you earn from this job, with no personal allowance.
BR stands for "Basic Rate". All income from this job is taxed at 20%, regardless of how much you earn. There's no tax-free allowance on this job because you're already using it on your main job.
If you earn £25,000 + £8,000 = £33,000 total, you should pay tax on £20,430 (£33,000 - £12,570). The BR code on your second job ensures this happens automatically.
If your main job already uses up your basic rate band (you earn over £50,270), your second job might get a D0 tax code, which taxes all income at 40%.
Example: If you earn £55,000 from your main job and £10,000 from a second job, the £10,000 would all be in the higher rate band, so it makes sense to tax it at 40% from the start.
Instead of giving all your allowance to one job, you can ask HMRC to split it between your jobs. For example, you might use 600L on one job and 657L on another (totaling 1257).
This can help spread your tax more evenly across both jobs, which might be useful for budgeting. Contact HMRC if you want to split your allowance - they'll update your tax codes accordingly.
National Insurance with Multiple Jobs
Here's where having multiple jobs can actually save you money. Unlike income tax, National Insurance is calculated separately for each job.
You get the NI threshold for EACH job
Each separate employment gets its own NI threshold of £12,570 per year. This means you pay less National Insurance with two smaller jobs than you would earning the same total in one job.
Example: Two Jobs
Example: One Job
The Result:
With two jobs paying £15,000 each, you pay £388.80 in NI.
With one job paying £30,000, you pay £1394.40 in NI.
Real-World Examples
You've paid £1,600 tax, but your total income of £18,000 is above the personal allowance of £12,570. You should only pay tax on £5,430. You've overpaid by £514! You can claim this back from HMRC at the end of the tax year, or ask them to adjust your tax codes.
This is correct! Your total tax of £5486.00 is exactly what you'd pay on £40,000 in one job. The BR code works perfectly here.
Common Issues and How to Fix Them
The most common issue is overpaying tax when both jobs are small and together don't exceed the personal allowance, but the second job uses a BR code.
- • Ask HMRC to split your tax code between both jobs
- • Claim a refund at the end of the tax year (HMRC usually does this automatically)
- • Use form P53 or P50 if you've stopped working
This happens less often, but can occur if HMRC doesn't know about your second job or your tax codes aren't set up correctly.
- • HMRC will eventually catch up and send you a tax bill
- • They might adjust your tax code to collect the underpayment
- • Better to tell HMRC about all your jobs to avoid surprises
Sometimes your second employer might not have the right tax code, especially when you first start.
- • Contact HMRC (not your employer) to update your tax code
- • Give your P45 from your previous job to your new employer
- • Complete a starter checklist if you don't have a P45
- • Check your payslip each month to ensure the correct code is being used
How to Check You're Paying the Right Amount
- 1Add up your total income
Calculate your combined gross income from all jobs for the year.
- 2Calculate what you should pay
Use our calculator to work out the correct tax on your total income as if it were one job.
- 3Add up what you've actually paid
Look at all your payslips and add up the total tax deducted across all jobs.
- 4Compare and act
If you've overpaid, claim a refund. If you've underpaid, contact HMRC to arrange payment.
Calculate Tax on Your Multiple Jobs
Use our specialized two jobs calculator to see exactly how much tax and National Insurance you'll pay across both jobs, and check if you're paying the right amount.
Calculate Tax on Two JobsKey Takeaways
- ✓One personal allowance for all jobs
You only get £12,570 tax-free across ALL your employment
- ✓BR tax code is normal for second jobs
Don't worry - it's designed to collect the right total tax
- ✓National Insurance is calculated separately
Each job gets its own £12,570 threshold - you might pay less NI overall
- ✓Check your total tax at year end
HMRC usually reconciles automatically, but it's worth checking
- ✓You won't pay more tax overall
Total tax on £40,000 is the same whether earned in one job or split across two