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Income Tax on Second Jobs
Income Tax on Second Jobs

What do I need to know?

Written by Karan
Updated over a week ago

DISCLAIMER: All tax related queries should be directed to HMRC and not to Orka Works.

If you’re working, you’re entitled to earn a certain amount of money without paying Income Tax. This is called the Personal Allowance and is £12,570 for the 2022/23 tax year.

You only get one Personal Allowance – so it’s usually best to have it applied to the job paying you the most.

If you work two jobs and neither income is above £12,570, you can split your Personal Allowance.

Example 1:

Jane works two jobs. Her main job pays £14,000 a year, and the second £6,000.

Her whole Personal Allowance is applied to her main job. If she lives in England, Wales or Northern Ireland, she pays Income Tax at the basic rate of 20% on the £1,430 of her pay that’s above the allowance for her main job – and also pays income tax at 20% on all her income from her second job.

Example 2:

Mohammed has two jobs. His main job pays £10,000 a year and his second pays £9,000.

Both of these are below the Personal Allowance, so he can split his allowance between the two jobs.

He can contact HMRC and get them to transfer £2,570 of unused allowance from his main job to his second job. Or he can wait until the end of the tax year, and ask HMRC for a refund.

You should only ask for your Personal Allowance to be split if your income from each job is predictable and stable. If it’s not, and one job ends up paying you more than expected, you will have underpaid tax.

Tax Codes for Second Jobs:

It’s important to check your tax codes. This will help make sure you’re paying the right amount of tax and don’t get unexpected tax bills, penalty charges and interest.

Your main job, assuming it pays you more than the Personal Allowance, should be 1257L for the 2022/23 tax year.

Your second job should have a BR, D0 or D1 tax code, depending on whether or not it’s taxed at the basic, higher or additional rate.

You can find your tax code on your payslips.

You can tell HMRC about starting a second job.

Personal Tax Account:

You can access your Personal Tax Account with HMRC through the following link.

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