Thinking of taking a second job in the UK? It’s a great way to earn extra money, but you might have a question about how much tax you’ll have to pay. Everyone has a Personal Allowance, which is the amount you can earn tax-free each year.
You pay tax on your second job at the same rates as your main job, usually 20% (basic rate) on all earnings from your second job. If your combined income pushes you into a higher tax band, some of your second job income may be taxed at 40% or even 45%.
In this blog, we’ll explain how much tax do you pay on a second job, helping you understand what to expect and how to manage your money wisely.
Your employer generally cannot stop you from having a second job. However, if your contract specifically restricts it or requires permission, you must follow those rules. Many employment contracts include clauses that restrict second jobs if they create a conflict of interest.
If your contract doesn’t mention second jobs, then legally, you’re free to take on extra work. However, some employers may require you to inform them about any additional jobs to manage working hours and ensure you’re not overworking. It’s always best to check your employment contract.
When you have two jobs, your Personal Allowance, the tax-free amount you can earn, is usually applied to your main job. Your second job is then taxed at a flat rate, often using a Basic Rate tax code.
In the UK, everyone has a Personal Allowance, the amount you can earn before paying Income Tax. For the 2025/26 tax year, this allowance is £12,570. You only get one Personal Allowance, so it’s usually best to apply it to the job where you earn the most.
If your combined income from both jobs is below £12,570, you can split your Personal Allowance between the two jobs. For example, if you earn £10,000 from your main job and £9,000 from your second, you can ask HMRC to transfer some of your unused allowance to your second job to avoid paying tax unnecessarily.
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:
|
Income Tax Band |
Tax Rate |
Taxable Income Range (£) |
|
Personal Allowance |
0% |
Up to 12,570 |
|
Basic Rate |
20% |
12,571 to 50,270 |
|
Higher Rate |
40% |
50,271 to 125,140 |
|
Additional Rate |
45% |
Above 125,140 |
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.
When you take on a second job, your new employer will need a tax code to calculate how much tax to deduct. This tax code is usually different from the one used for your main job, especially if your Personal Allowance has already been used up. Here’s a common tax codes for a second job:
BR – Basic Rate
D0 – Higher Rate
D1 – Additional Rate
0T – No Personal Allowance
National Insurance (NI) is another deduction from your earnings. For the 2025/26 tax year, you pay Class 1 NI contributions if you earn more than £242 a week in each job. If you earn above this threshold in both jobs, you will pay NI contributions on both incomes separately.
Taking a second job can affect your benefits, especially if they're means-tested. Extra income may reduce payments for Universal Credit, Housing Benefit, Tax Credits, or Council Tax Reduction. For Universal Credit, earnings above your work allowance reduce your benefit by 55p per £1.
Income changes must be reported to HMRC, DWP, or your local council to avoid overpayments or penalties. Some benefits, like Income Support or Jobseeker’s Allowance, may stop entirely.
Taking a second job allows you to pay into another workplace pension scheme. However, it’s important to keep track of all your pension contributions to avoid losing track of small pension pots. If you have multiple small pensions, you might want to consider combining them later for easier management.
If you are already receiving a State Pension or other pensions and start working again, this could have tax implications, so ensure your tax code is correct.
If your second job is self-employed, you need to:
If you have both employed and self-employed income, your Personal Allowance is usually applied to the job that earns the most. However, if your earnings are stable, you can ask HMRC to split the allowance between both sources of income.
Having a second job can be a great way to increase your income, but it’s essential to understand how it affects your tax and National Insurance contributions. By staying organised and informed, you can avoid surprises and make the most of your additional work.
If you're confused about how tax works with a second job. It can be tricky to understand tax codes, allowances, and National Insurance. At PHS Associates, we make it easy. Our team can explain everything in simple terms and help you work out how much tax you need to pay. Contact us by phone at 0208 8611685 or by email at info@phs-uk.co.uk. Whether you have one job, two jobs, or are also self-employed, we’re here to support you.
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