How much tax do I pay if I have a second job?

*The Government has announced plans to cut the basic rate by a percentage point to 19% by 2024.

To work out how much Income Tax you will pay, you will need to work out how much of your earnings will fall into each band. So, for example, if you are an employee for both of your jobs and are earning £31,000 a year in job one and £20,000 a year in job two your combined income would be £51,000, with the breakdown looking roughly like this:

 Taxable amountPortion of wageTax rateTotal Personal Allowance£0 – £12,570£12,570Tax free£0Basic Rate£12,571 – £50,270£37,70020%£7,540Higher Rate£50,270 – £51,000£73040%£292Total £51,000 £7,832

If the amount you are earning from your two jobs is over £12,570, HMRC will usually view your higher earning job as your main income, and your other job as a supplementary income. Your personal allowance will be allocated to your main income and your second job will usually be taxed at the basic rate of 20%.

The tax codes that appear on your payslips will usually be 1257L on your primary income and BR (basic rate), D0 or D1 on your second job.

If the amount you earn in your primary job, or both of your jobs, is less than the personal allowance, you can request HMRC to split your personal allowance between your jobs. This will often involve sending P60s, which you’ll receive from your employers at the end of the tax year, from both of your jobs.

To make sure you are allocated the right tax codes and are paying the right amount of tax, when you start your second job, complete HMRC’s new starter checklist from your new employer. This will help HMRC allocate the right tax code.

Author: wpadmin

Leave a Reply

Your email address will not be published.