Tax on a Second Job: Understanding Your UK Tax Position

Taking on extra work can boost your income, but it can also leave you paying too much or too little tax. Second job tax depends on your total income for the tax year, not on how many jobs you have.

This guide explains what changes when you add a second job or self-employed work. The figures apply to 2026/27, which runs from 6 April 2026 to 5 April 2027. Scotland has different Income Tax bands, and Scottish and Welsh tax codes start with different letters.

How Second Job Tax Works

You get one Personal Allowance each tax year, however many jobs you have. HMRC adds your taxable income together and applies these Income Tax rates:

Taxable income	Rate
Up to £12,570	0%
£12,571 to £50,270	20%
£50,271 to £125,140	40%
Over £125,140	45%

Your Personal Allowance falls by £1 for every £2 of adjusted net income above £100,000. It reaches zero at £125,140.

A second job does not create a separate tax charge. You pay more tax because your total income has risen, and the amount deducted from each payslip depends on your tax codes.

How Tax Codes Work With Two Jobs

Each job usually has its own tax code. HMRC normally allocates your Personal Allowance to the job that pays the most, then gives your second job a code without an allowance.

Code	What it means
1257L	Your employer applies the standard Personal Allowance
BR	You pay 20% on all pay from this job
D0	You pay 40% on all pay from this job
D1	You pay 45% on all pay from this job

These codes affect how your employer deducts tax during the year. They do not change the tax you ultimately owe on your total income. Our guide to PAYE tax codes explains the numbers and letters in more detail.

When you start a second job, you will not have a P45 because you still work for your first employer. Complete a starter checklist instead and state that you have another job. This helps your new employer apply the right code from your first payment.

If Your Main Job Pays Less Than £12,570

A code such as BR can cause problems if your main job does not use your full Personal Allowance. HMRC might allocate any unused allowance to your other job, depending on your circumstances.

This example assumes you have two jobs and no other income:

	Tax
Job 1 pays £9,000	£0
Job 2 pays £8,000 on a BR code	£1,600
Tax deducted	£1,600
Tax due on total income of £17,000	£886
Overpayment	£714

You can ask HMRC whether it can split your Personal Allowance between your jobs. A split works best when your pay is steady, because irregular income can lead to the wrong deductions.

HMRC checks your tax after the year ends. If you paid the wrong amount, it will usually send a P800 calculation showing whether you are due a refund or owe tax.

If a Second Job Takes You Into the Higher Rate

The opposite problem can arise when your combined income passes £50,270. A BR code only deducts 20%, even if part of your second job falls into the 40% band.

This example assumes the standard Personal Allowance and no other income:

	Tax
Main job pays £45,000 on code 1257L	£6,486
Second job pays £15,000 on a BR code	£3,000
Tax deducted	£9,486
Tax due on total income of £60,000	£11,432
Shortfall	£1,946

HMRC may adjust your tax code to collect tax it estimates you owe, over one or more tax years. It may also write to you after the tax year ends.

Extra income can affect other thresholds too. The High Income Child Benefit Charge can apply when your adjusted net income exceeds £60,000. Above £80,000, the charge equals all the Child Benefit paid.

National Insurance on a Second Job

National Insurance works differently from Income Tax. Thresholds usually apply to each job rather than to your combined pay, unless your employers are connected.

For 2026/27, employees pay Class 1 National Insurance of:

• 8% on weekly earnings from £242 to £967
• 2% on weekly earnings over £967

For example, if two unconnected employers each pay you £200 a week, you will not usually pay employee National Insurance on either job. HMRC still treats your contributions as paid on earnings from £129 to £242 a week, which protects your National Insurance record.

Higher earners can sometimes defer National Insurance on a second job. With two jobs, you need to earn at least £967 a week from one job and at least £242 a week from the other. If HMRC agrees, you pay 2% rather than 8% on earnings from £242 to £967 in one job, then settle anything still due after the tax year ends.

HMRC must receive form CA72A by 14 February 2027 to defer for 2026/27.

Self-Employed Work Alongside a Job

Freelance work and side businesses follow different rules because no employer deducts tax for you. If you are unsure of your status, HMRC’s employment status tool gives its view of a specific engagement.

You can usually claim the trading allowance of up to £1,000 a year. If your gross trading income exceeds £1,000, you must register for Self Assessment. You can then deduct either the £1,000 allowance or your allowable expenses, whichever suits you better.

For example, suppose you earn £35,000 from your job and £4,000 from freelance work, with £500 of expenses. Using the allowance leaves £3,000 of taxable profit, so you owe £600 at 20% through Self Assessment.

You also pay Class 4 National Insurance if your profits exceed £12,570. The rates for 2026/27 are 6% on profits up to £50,270 and 2% above that.

The government plans to raise the trading allowance and the Self Assessment reporting threshold to £3,000 from 6 April 2027. Budget 2026 confirmed that this requires legislation in Finance Bill 2026-27, so the £1,000 limit still applies for now.

You must tell HMRC by 5 October after the tax year if you need to file a return for the first time or after a gap. That date has passed for 2025/26, so register as soon as you can if you missed it. You must still pay any tax due by 31 January 2027, and our article on undeclared income explains the wider risks of delay.

What to Do When You Start a Second Job

1. Tell your new employer about your other job on the starter checklist.
2. Compare the code on your first payslip with your code in the Check your Income Tax service or the HMRC app.
3. Check that HMRC has the correct details for each job. If you cannot use the online service, wait 35 days after starting before you contact HMRC.
4. Keep records of any self-employed income and expenses.
5. Tell HMRC through your Personal Tax Account or the HMRC app if you leave a job.

Your position depends on your income and other circumstances, so the examples above are a general guide. Our tax compliance and planning team can review your tax codes, income and reporting duties. Contact Nichols & Co if you would like us to check your position.