How Much Tax Do You Pay On A Second Job

PHS Team

13 Aug, 2026

Thinking of taking a second job in the UK? Whether you're saving for a holiday, paying off debt, or increasing your monthly income, a second job can help you reach your financial goals. However, before you start, it's important to understand how second job tax works.

You don't pay a special tax just because it's a second job. Instead, you'll pay Income Tax based on your total earnings across both jobs. In most cases, your Personal Allowance is used against your main job, while your second job is taxed separately using a different tax code.

In this blog, we'll explain how much tax you pay on a second job, how tax codes work, and what you need to know about National Insurance and other important rules.

Can Your Employer Stop You From Having a Second Job?

In most cases, your employer cannot stop you from taking a second job. However, it's important to check your employment contract before accepting additional work.

Some contracts include clauses that:

• require you to get permission before taking another job
• prevent you from working for a competitor
• limit your working hours to protect your health and safety
• avoid conflicts of interest

If your contract doesn't restrict second jobs, you're generally free to work elsewhere. However, you must still make sure your total working hours are legal and that your second job doesn't affect your performance in your main role.

How Income Tax Works When You Have Two Jobs

If you have two jobs, you'll pay Income Tax based on your combined earnings, not separately for each employer. Each employer deducts tax through PAYE using the tax code provided by HMRC.

You only receive one Personal Allowance, which is normally applied to your main job where you earn the most. Your second employer usually receives a different tax code, meaning most or all of your second job earnings are taxed.

If your total income stays within the Basic Rate band, you'll usually pay 20% tax on your second job income. However, if your combined earnings move into the Higher or Additional Rate bands, part of your income may be taxed at 40% or 45%.

HMRC normally updates your tax codes automatically when they receive information from both employers. If you think your tax code is incorrect, contact HMRC as soon as possible to avoid paying too much or too little tax.

Personal Allowance and Tax Bands

In the UK, everyone is entitled to one Personal Allowance, which is the amount you can earn before paying Income Tax. For the 2026/27 tax year, the Personal Allowance is £12,570.

Your Personal Allowance is usually applied to the job where you earn the most. In some situations, if your total income is below the Personal Allowance, HMRC may allow your allowance to be split between both jobs. If you think you're paying too much tax, you can ask HMRC to review your tax code.

What Happens If Your Earnings Exceed The Personal Allowance?

If your total income from both jobs exceeds £12,570, you will pay Income Tax on the amount above this threshold. The tax rate depends on your total income:

For example, if your main job pays £45,000 and your second job pays £12,000, your combined income is £57,000. Your Personal Allowance will be applied to your main job, and your second job income will be taxed at the basic rate initially.

However, since your total income is over £50,270, some of your second job income should be taxed at the higher rate, so you need to inform HMRC to avoid underpaying tax and facing a bill later.

Tax Codes for a Second Job

When you start a second job, your employer uses a tax code for your second job to work out how much Income Tax to deduct through PAYE. The tax code is usually different from your main job because your Personal Allowance is normally applied to your primary employment.

Here are the most common tax codes used for a second job:

What Happens If You Pay Too Much Tax?

Sometimes your second employer may receive the wrong tax code, especially if you've recently started the job or HMRC hasn't updated your records yet. This can result in paying more tax than necessary.

If this happens, HMRC usually corrects your tax code automatically once your employment details are updated. If you've overpaid tax, you can normally claim a refund through HMRC.

It's a good idea to check your payslips regularly and contact HMRC if you think your tax code is incorrect.

National Insurance Contributions on a Second Job

National Insurance is worked out separately for each job, unlike Income Tax which is based on your total income.

For the 2026/27 tax year, you'll usually pay Class 1 National Insurance if your earnings in each job are above the weekly threshold. If both jobs pay above this limit, you'll pay National Insurance in both jobs.

This means you could pay National Insurance twice, even if your combined earnings are similar to someone working one higher-paid job.

Self-Employment

If your second job is self-employed rather than employed, you'll have extra responsibilities.

You'll normally need to:

• Register as self-employed with HMRC.
• Submit a Self Assessment tax return each year.
• Pay Income Tax on your profits.
• Pay National Insurance if your profits exceed the relevant thresholds.

Your Personal Allowance is still shared across all your income, whether it comes from employment, self-employment, or both.

If you have both employed and self-employed income, your Personal Allowance is usually applied to the source where you earn the most.

A second job is a great way to earn extra income, but it's important to understand how it affects your Income Tax and National Insurance. Knowing the rules can help you avoid unexpected tax bills.

If you're unsure how tax on a second job works, PHS Associates can help. Our team can explain your tax code, allowances, and National Insurance in simple terms. Contact us on 0208 8611685 or email info@phs-uk.co.uk  for expert advice.

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