2 jobs tax

Is it okay for you to work a second job?

First and foremost, you must determine if a second job is a realistic alternative.

Begin by ensuring that your present contract does not preclude you from taking on more employment. For example, it might be seen as a conflict of interest.

Talk to your primary employer whether there is anything in there that would prohibit you from taking on the other employment. However, if there is nothing in the contract, you are free to depart.

How HMRC calculates tax

The tax system considers one employment to be your primary source of income, from which you get your £11,850 personal allowance - the amount you earn before paying any tax.

There will be no personal allowance since your second income will be put on top. Though it seems that you are taxed more on this money, if you added it to your earnings from your other employment, you would pay precisely the same amount of tax overall.

How much tax is required to pay for a second job?

This is determined by the pay scale for each job.

If your first employment pays less than your personal allowance, your second job tax will normally be set at the regular 20%.

What exactly is a BR tax code?

A second job tax is often paid using a BR tax code.

The BR stands for Basic Rate, which is set at 20%.

However, your additional earnings may push your total earnings for the year into a higher tax rate (if you earn more than £46,351), requiring you to pay more tax.

What exactly is a BR tax code?

A second job tax is often paid using a BR tax code.

The BR stands for Basic Rate, which is set at 20%.

However, your additional earnings may push your total earnings for the year into a higher tax rate (if you earn more than £46,351), requiring you to pay more tax.

How to Avoid Underpaying or Overpaying Taxes

Make sure you acquire a Starter form (formerly known as a P46) from your new company when you start your new work. This form allows you to specify your additional employment, which will be sent to HMRC.

You should also look at your tax laws. The second task will most likely include the code BR or D0 after a number.

Pensions and second jobs

If you have the chance to contribute to a pension via your second employment, keep track of the specifics.

If you make less in your second job and hence contribute less to this pension, it may be a modest sum that you overlook. When you quit the second job, you may always combine it with other pension pots.