In today’s economy, more and more people in the UK are turning to second jobs or side hustles to make ends meet. Whether it’s saving for a family holiday, tackling rising living costs, or simply building a financial safety cushion, a second income can feel like a lifeline.
But here’s the catch: many workers quickly discover that their tax deductions change once that extra income kicks in. Suddenly, questions like “Do you get taxed more on a second job?” or “How much tax do you pay on a second job?” start to matter.
This guide breaks down everything you need to know about second job tax in the UK for 2025/26, from tax codes to National Insurance, and even how side jobs affect benefits like Universal Credit.
Do You Get Taxed More on a Second Job?
Let’s clear up the biggest myth first: no, you don’t pay a “penalty tax” for having a second job. The UK tax system is progressive, which means the more you earn overall, the more tax you’ll pay in total.
Here’s how it works:
- Everyone gets a tax-free personal allowance (£12,570 for 2025/26).
- Income above this allowance is taxed according to bands:
- 20% basic rate (up to £50,270)
- 40% higher rate (£50,271–£125,140)
- 45% additional rate (above £125,140)
Your combined income from all jobs determines which band you fall into.
Example:
- Office job: £18,000/year
- Weekend delivery job: £8,000/year
- Total income: £26,000/year
Sarah’s delivery job didn’t trigger a special tax—it simply added to her overall income, which was already taxable.
How Second Job Tax Works in Practice
Many people feel their second job is “taxed harder,” but in reality:
- Your main job uses your personal allowance.
- Your second job gets a separate tax code, often meaning no allowance is applied.
That’s why your side income often looks like it’s being taxed more—it’s not higher tax, it’s just that the allowance has already been used up by your main job.
Second Job Tax Codes Explained
HMRC assigns tax codes to make sure you don’t accidentally claim your personal allowance twice.
- BR – all income taxed at 20%
- D0 – all income taxed at 40%
- D1 – all income taxed at 45%
If your second job is incorrectly coded, you might overpay. For example, Sarah (Manchester) found her parcel job was coded BR, meaning all her weekend income was taxed at 20%—even though some of it should have been tax-free. A call to HMRC fixed the issue.
| Tip: Always check your payslips to ensure your tax code is correct. |
Calculating How Much Tax You’ll Pay on a Second Job
You can work it out manually, but the easiest way is to use a second job tax calculator or the official two jobs tax calculator UK gov tool.
Example Breakdown:
| Job Type | Annual Pay | Tax Deducted | Net Income |
| Office Job | £18,000 | £1,486 | £16,514 |
| Weekend Delivery | £8,000 | £1,600 | £6,400 |
Key Point: What matters is your total income. If it pushes you into a higher bracket, you’ll owe more tax overall.
National Insurance Contributions (NICs)
It’s not just income tax you need to think about. National Insurance contributions (NICs) also apply.
- If each job pays above the weekly threshold, you may pay NICs on both jobs.
- Over time, HMRC usually balances this out, but it can feel like you’re paying “double” initially.
|
Tip: Keep records and check your NIC history via your HMRC account. |
Other Factors to Consider
Beyond tax and NICs, your second job could also affect:
- Pension contributions – Some employers automatically enroll you. Two pensions can be a good thing, but check fees.
- Student loan repayments – Higher total income means higher deductions.
- Universal Credit – If you claim benefits, extra income will reduce what you receive.
Second Job Scenarios Explained
- Part-time role (under 16 hours/week)
Common in retail or hospitality. As long as your tax code is right, deductions will be accurate.
- Freelance or self-employed side hustle
This requires a self-assessment tax return. You’ll need to report all income, deduct business expenses, and pay self-employment tax (income tax + Class 2/4 NICs).
- Two full-time jobs
This is rare but possible. In this case, you’re more likely to cross into the higher-rate (40% tax bracket) or even the additional-rate (45%) bracket.
Myths About the Second Job Tax
Myth 1: You always get taxed more on a second job.
Truth: No tax depends on your total income.
Myth 2: You lose all your second job pay in tax.
Truth: You’ll still take home most of it, especially if your combined income stays within the basic rate band.
Myth 3: HMRC automatically balances everything perfectly.
Truth: Mistakes happen. It’s your responsibility to check.
Tips for Managing Your Second Job Tax
- Use calculators before starting a new role.
- Check and update your tax codes with HMRC.
- Keep all payslips and student loan statements.
- Consider the effect on Universal Credit if you claim it.
- If your combined income is close to a new bracket, talk to a tax professional—sometimes a small pension contribution can reduce liability.
FAQs
Q1: How much tax do you pay on a second job?
A: The tax you pay on a second job depends on your combined income and tax code. To get an accurate figure, use HMRC’s official tax calculators or check your personal tax account online.
Q2: Do you pay more tax on a second job?
A: There’s no extra penalty for having a second job. Your total income simply determines the income tax rate applied across all jobs.
Q3: How do tax codes work for a second job?
A: Your main job typically uses your personal allowance. For your second job, HMRC may assign a tax code like BR, D0, or D1, which ensures the correct amount of tax is deducted.
Q4: Can I claim expenses on a second job?
A: If you’re self-employed in your second job, you can deduct allowable business expenses, such as travel, software subscriptions, or equipment costs, to reduce your taxable profit.
Q5: Does a second job affect Universal Credit?
A: Yes. Universal Credit considers your total earnings, including any income from a second job. Reporting all income accurately is essential to avoid overpayments or penalties.
Q6: Do I pay National Insurance twice with two jobs?
A: Yes, if both incomes are above the NIC threshold. HMRC may later correct any overpayment.
Final Thoughts
A second job in the UK can be a smart way to boost your finances—whether you’re saving, investing, or simply covering rising costs. But unless you understand how the second job tax works, that extra money might not stretch as far as you think. The key takeaway is to check your tax codes, use a second job tax calculator, and keep records while planning. The system isn’t designed to punish you for earning more—it simply combines all your income to calculate your tax fairly. With the right planning, your side hustle or second job can truly help you achieve your financial goals.
Visit: Pure Magazine
