How Second Job Income Is Taxed in the UK: A Complete Guide

Taking on a second job in the UK can boost your income, but it also brings tax responsibilities that need to be understood to avoid surprises. Below, we detail how tax on a second job works, how your earnings are assessed, and how to ensure you stay compliant while maximising your take-home pay.

Understanding How the UK Tax System Works for Multiple Jobs

In the UK, income tax on a second job is calculated based on your total taxable income across all sources. The HMRC considers your combined earnings when determining the tax rate you owe.

You have one Personal Allowance (£12,570 for the 2025/26 tax year), which is applied to your primary job by default. Your second job will usually be taxed from the first pound earned because your allowance is already used up by your main employment.

Key Tax Bands and Rates for 2025/26

Income Band (Annual) Tax Rate Notes

Up to £12,570 0% Personal Allowance (usually on main job)

£12,571 – £50,270 20% Basic Rate

£50,271 – £125,140 40% Higher Rate

Over £125,140 45% Additional Rate

When your combined earnings push you into a higher tax band, the additional income from your second job will be taxed at the higher applicable rate.

National Insurance Contributions (NIC) on a Second Job

You may have to pay National Insurance on both jobs if your earnings from each job exceed the NIC thresholds.

• Class 1 NIC Primary Threshold: £12,570/year per job
• If your first job already exceeds this threshold, any additional qualifying income from your second job will also incur NIC.

However, if you are self-employed for your second income stream, different NIC rules (Class 2 and Class 4) will apply.

PAYE Coding and Second Job Tax Codes

HMRC assigns a tax code to each job. Your main job gets the standard tax code (e.g., 1257L), while your second job often receives a BR (Basic Rate) tax code, meaning 20% tax is deducted from all income earned from that job.

If your combined income pushes you into the higher rate threshold, you might receive a D0 (40%) or D1 (45%) tax code for your second job.

Common Tax Scenarios for Second Jobs

1. Part-Time Second Job
2. If your second job is part-time and earns under £1,048 per month, you may pay less or no NIC, but you’ll still pay income tax if your allowance is used up.
3. Self-Employment as a Second Job
4. You must complete a Self Assessment tax return, declare total income, and pay tax and NIC accordingly.
5. Casual or Temporary Work
6. Short-term roles are still taxable. Always check your payslips to ensure the correct tax code is used.

How to Ensure You Pay the Correct Tax on a Second Job

• Check Your Tax Code: Make sure HMRC assigns the right codes to both jobs.
• Update HMRC: Report your second job immediately to avoid over- or underpaying tax.
• Keep Records: Maintain payslips and income details for both roles.
• Use the HMRC Tax Calculator: Estimate your annual tax liability based on combined earnings.

Reducing Your Tax Burden Legally

While you must pay the correct income tax on a second job, there are ways to reduce your liability:

• Claim allowable work-related expenses.
• Make pension contributions to reduce taxable income.
• Check if you qualify for tax reliefs such as Marriage Allowance.
• Use your savings allowance or dividend allowance if you have other income streams.

Consequences of Incorrect Tax Payments

Failing to pay the right tax on a second job can lead to:

• Backdated tax bills
• Penalties and interest charges
• Possible HMRC investigation

Regularly reviewing your tax situation prevents such outcomes.

Final Thoughts

Managing income tax on a second job requires careful planning and regular checks on your tax codes and earnings. By understanding the UK’s tax structure, you can ensure compliance, avoid unexpected bills, and make the most of your additional income.