Working more than one job has become increasingly more common. However, working multiple jobs does not increase your tax unfairly. Instead, your total income determines how much tax you pay.
How Your Personal Allowance Works
Your Personal Allowance is the amount you can earn each tax year without paying Income Tax. For most people, this amount is £12,570. You only receive one Personal Allowance per tax year. This applies regardless of how many jobs, pensions or income sources you have.
In most cases:
- Your main job uses your full Personal Allowance
- Your other jobs do not include a tax-free allowance
As a result, you usually pay tax on all income from your second job.
How Tax Works Across Multiple Jobs
HMRC looks at your total income across all jobs. The number of jobs does not change how much tax you owe.
For example: Earning £25,000 from one job leads to the same tax as splitting it across two jobs.
Your total income determines your tax band:
| Tax Band | Income Range | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
However, income from multiple sources can cause your tax to balance incorrectly during the year. HMRC reviews your position after the tax year ends and corrects any differences.
When Your Income Is Below the Personal Allowance
Sometimes, each job pays less than £12,570. In this case, you should add all income together. You usually do not pay Income Tax if your total income stays below the Personal Allowance.
However, you might still pay tax during the year. This can happen if your weekly or monthly income exceeds your allowance at certain times. After the tax year ends, HMRC reviews your records and issues any refund if needed.
Splitting Your Personal Allowance
You can ask HMRC to split your Personal Allowance between jobs. This may reduce tax deductions from your second job.
For example: If both jobs pay lower amounts, sharing your allowance can improve your monthly cash flow.
However, you should take care if your income charges regularly. An incorrect split can lead to underpayment. You may then need to repay tax later.
How National Insurance Works Differently
National Insurance works separately for each job. Each job has its own earnings threshold.
For example: You start paying National Insurance above £242 per week per job.
As a result, you may pay National Insurance on multiple jobs at the same time. This applies even if your total income remains relatively modest. Additionally, different contribution rates may apply at higher earnings levels.
How Your Tax Codes Work With Multiple Jobs
Each job has its own tax code. Employers use this code to calculate how much tax to deduct from your wages.
Typically:
- Your main jobs uses code 1257L
- Your second job often uses BR, D0 or D1
These codes mean:
| Tax Code | Tax Band | Tax Rate |
|---|---|---|
| BR | Basic Rate | 20% |
| D0 | Higher Rate | 40% |
| D1 | Additional Rate | 45% |
For example: If your second job uses the BR code, your employer taxes all earnings at the Basic Rate. This happens because your Personal Allowance applies to your main job.
If your tax codes look incorrect, you should contact HMRC immediately.
Starting a Second Job
When you start another job, you must complete a start checklist. You should confirm that you already have another job. This step ensures your employer applies the correct tax code from your first payslip. It also helps HMRC build an accurate picture of your income.
If you enter incorrect details, you may pay too much or too little tax.
Short-Term and Casual Work
Temporary, seasonal or casual jobs still counts towards your total income. Your employer will deduct tax through PAYE.
If you work several short-term jobs, each employer may not know about your other income. This can lead to incorrect tax deductions. As a result, you might pay too much or too little tax during the year.
HMRC reviews your total income after the tax year ends. They then correct any differences. You may receive a refund or a request for payment.
Self-Employment and Side Hustles
Many people combine employment with self-employed work. This includes freelance work, online selling or consulting.
In this case:
- Your Personal Allowance usually applies to your main job
- You may need to complete a Self Assessment tax return
You must report your self-employment income to HMRC if it exceeds £1,000. You must also keep accurate records of your income and expenses.
Additionally, you may need to pay Class 2 and Class 4 National Insurance. These contributions depend on your profits rather than total income.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.