It’s common for people to work multiple jobs. You could have a full-time job and a second job, perhaps working evenings or weekends. Or you could work multiple part-time jobs. Many also do some self-employed work alongside a second job.
All of these working arrangements can cause some confusion about the amount of tax you pay. But things aren’t as complicated as you might think.
In this post we’ll explain how to work out the amount of tax you pay if you work multiple jobs – whatever your arrangement.
Second Job Tax Rules
Under UK tax law, all workers, regardless of their situation, get an annual personal allowance. This is the amount of money you can make in a year before you pay any tax. Between 2022 and 2026, the annual personal allowance is £12,570. So you only pay tax on any income you make that’s over £12,570.
Most people will pay the basic tax rate of 20% on any income they make over £12,570. But you’ll pay 40% on any income you make over £50,271, and 45% on anything you make over £150,000.
How Much Do You Get Taxed On a Second Job?
HMRC will view one of your jobs as your “main” income. Your annual income in one job may fall short of your personal allowance. In which case, you won’t pay any tax on this income. However, one of your jobs will push your annual earnings over £12,570, so you’ll pay 20% tax on this income – your “main” income.
So when you look at your payslips, it will look like you’re paying a lot more tax on one job than the other. However, if you were to combine your earnings from both jobs, you’d end up paying the same amount of tax overall – that is, 20% on anything you make over £12,570.
Your annual personal allowance accounts for all of your income. So the same rules above apply: You’ll pay no tax on the first £12,570 you earn across all of your jobs, and the basic rate of 20% on anything you make over £12,570.
But how much tax you pay in each job will depend on how much you make in each position.
If you have two particularly well-paid jobs, your annual income may exceed the basic rate threshold of £50,270. In this case, you’d pay 40% tax on any income you make over this amount. And once again, you’ll most likely pay this higher tax rate on whichever job pays the most, as HMRC will view this job as your “main” income.
Make Sure You’re On The Right Tax Code
To avoid paying too much tax – or too little – it’s important that you tell HMRC about your working situation.
When you start your second job, ask your new employer for a P46 form. Fill this in with your employment details and your second employer will send it to HMRC. HMRC will then know how many jobs you’re working, and how much you make in each job. They’ll therefore know how much to tax you, and on which income to tax you.
If you don’t do this, HMRC may put you on an emergency tax code in your second job. This will probably mean you’ll pay a lot more tax than you should.
How Much Do You Get Taxed If You’re Self-Employed With a Second Job?
The same rules apply to self-employed people: You get your annual income of £12,570, and you pay a basic rate of 20% on anything you make over £12,570. If your income from your second job is more than £12,570 a year, then you’ll pay 20% on that income. But if your income from your second job falls short of this amount, then you won’t pay any tax on it.
However, no matter what your situation is, if you’re self-employed then you’ll have to submit a self-assessment tax return to HMRC each year. On this return you’ll tell HMRC about all of your income – from your second job, and from your self-employed work. HMRC will then work out how much tax you owe based on your entire income. If you paid any tax in your second job, HMRC will take this into account when working out your entire tax bill.
And again, you’ll pay the higher rate of 40% on anything you make over £50,270.
Managing Tax as a Self-Employed Worker
If you’re self-employed, it’s good practice to set aside at least 20% of whatever income you make from your self-employed work – even if you’re already paying tax on your second-job. That way, you’ll be sure to have enough money to cover your tax bill each year.
It pays to set aside a little more than 20%, because you’ll probably also have to make National Insurance Contributions on your self-employed income. Head here to read our guide to Class 2 National Insurance, and here to read our guide to Class 4 National Insurance.
You can also read our complete guide to going self-employed, and your tax responsibilities.
Further Support for Self-Employed Workers
Insurance can provide essential protection against many of the problems that self-employed workers face, from unpaid invoices to tax disputes. At Tapoly, we specialise in affordable insurance for self-employed freelancers and contractors, with cover starting from just 35p a day.
If you have any questions, or you’d like to discuss your options, you can contact the Tapoly team at info@tapoly.com, call our info line on +44(0)207 846 0180, or use the chat box on our website.