Second Job Tax Calculator

How to use this calculator

1. Put the larger job firstBy convention the personal allowance sits with the main job. If the allowance is on the smaller job, swap the figures to see what that costs.
2. Pick the actual code on the second jobBR is the default. D0 and D1 are used where HMRC knows total income reaches the higher or additional rate.
3. Try the split optionHMRC can divide the allowance across both codes. That collects the right amount during the year rather than refunding it later.
4. Read the gap, not just the totalThe useful output is whether PAYE over- or underdeducts, because that tells you whether to expect a refund or a bill.

The tax is right; the collection is not

The persistent myth about second jobs is that they are taxed at a penal rate. They are not. Income tax is charged on your total income for the year, and it makes no difference whether that total arrives from one employer or four.

What differs is how it is collected. PAYE is designed to get the right answer across a year for a single employment, and it does that by spreading the personal allowance evenly across pay periods.

With two employers, neither knows what the other is paying. Only one code can carry the personal allowance, so the other is normally BR — basic rate on every pound, with no allowance at all.

That produces the impression of harsh taxation on the second job, because the deduction starts immediately rather than after £12,570 of earnings. The total across both jobs is usually about right, but the distribution feels wrong.

Where it genuinely goes wrong is at the edges. If the main job does not use the full personal allowance — a part-time main job, or one that started mid-year — then some allowance goes unused while the second job is taxed at 20% from the first penny. That is an overpayment.

In the other direction, if the two jobs together push total income into the higher-rate band, a BR code on the second job deducts only 20% on income that should be taxed at 40%. That is an underpayment, and it usually surfaces as a tax code adjustment a year later.

HMRC can fix both by splitting the allowance across the two codes. It is not automatic, and it is worth asking for when the main job does not use the whole allowance.

National Insurance is genuinely different, and this is the one place where two jobs really do produce a different answer. NI is charged separately on each employment, each with its own threshold, so income split across two employers can pay less NI than the same total from one.

That is a real feature of how the legislation works, not a loophole, and it is one of the few structural advantages of holding two jobs.

Worked example: £28,000 plus £9,000

Total income is £37,000. The personal allowance is £12,570, so taxable income is £24,430, all within the basic rate band. Tax due: £4,886.

Now what PAYE deducts. The main job carries the full allowance, so £28,000 − £12,570 = £15,430 is taxed at 20%, giving £3,086.

The second job on a BR code is taxed at 20% on the whole £9,000, giving £1,800.

Total deducted: £4,886. Exactly right.

That is the well-behaved case, and it is why most people with two jobs never notice a problem. The main job uses the full allowance, both jobs sit in the basic rate band, and BR gets the answer right.

Now break it. Suppose the main job pays £8,000 rather than £28,000, and the second pays £9,000. Total £17,000, taxable £4,430, tax due £886.

PAYE deducts nothing from the main job — it is below the allowance. But it deducts 20% of £9,000 from the second job, which is £1,800.

So £1,800 is deducted against a liability of £886 — an overpayment of £914, on an income of £17,000. That is a substantial sum to be missing all year, and it is precisely the position many people with two part-time jobs are in.

The fix is to ask HMRC to split the allowance: £8,000 against the first job and the remaining £4,570 against the second. Then the deductions match the liability and the money arrives during the year rather than after it.

Now the opposite. Main job £45,000, second job £15,000. Total £60,000, taxable £47,430. Tax due is £7,540 at basic plus £3,892 at higher, which is £11,432.

PAYE deducts £6,486 from the main job and 20% of £15,000 from the second, which is £3,000 — total £9,486. That is £1,946 too little, and it will be collected through next year's tax code.

A D0 code on the second job would deduct 40% of £15,000, which is £6,000, giving £12,486 — now £1,054 too much. Neither simple code gets it exactly right, which is why the split option exists.

On the National Insurance side of the first example: £28,000 gives £1,234.40 and £9,000 gives nothing, since it is below the threshold. Total £1,234.40. The same £37,000 from one employer would give £1,954.40 — so splitting saves £720 a year in National Insurance.

Common two-job situations

The pattern is clear. BR gets it right when the main job uses the full allowance and total income stays in the basic rate band. It overdeducts when the allowance is unused, and underdeducts once the higher rate is reached. Both are fixable by asking HMRC to adjust the codes — the first is worth doing during the year, the second prevents a bill later.

National Insurance, pensions and telling HMRC

National Insurance is the genuine structural difference, and it cuts both ways.

The advantage is that each employment gets its own threshold. Two jobs at £15,000 each pay NI only on the £2,430 above the threshold in each, while a single £30,000 job pays on £17,430. That can be worth several hundred pounds a year.

The disadvantage is the National Insurance record. A qualifying year for the State Pension requires earnings above the lower earnings limit in an employment. Two small jobs, each below that limit, can leave a gap in the record even though the combined income would comfortably have qualified.

Anyone with two genuinely small jobs should check their NI record rather than assume, because gaps discovered decades later are expensive to fill and sometimes impossible.

Auto-enrolment works per employment too. Each employer assesses you separately against the earnings trigger, so two jobs below it means no workplace pension at all despite a decent total income. You can usually ask to opt in, and the employer must then contribute.

Student loan repayments are also assessed per employment against the threshold, which means two jobs each below it produce no repayments during the year — but the liability is recalculated on total income if you file a tax return.

On telling HMRC: do it rather than waiting for the system to catch up. A new employer submits a starter declaration, and if it is completed incorrectly — claiming this is your only job when it is not — you can end up with two allowances applied and a large underpayment.

A personal tax account lets you see both employments, check the codes and estimate the year. Correcting a code takes minutes there and prevents most of the problems described above.

If your circumstances are complicated — self-employment alongside employment, or three or more jobs — you may need to file a self assessment return, and the reconciliation happens there rather than through codes.

One final practical point. If you leave the main job and keep the second, tell HMRC immediately. Otherwise the allowance stays attached to a job with no income while the remaining job continues on BR, which produces exactly the overpayment described above for as long as it goes unnoticed.

Assumptions and limitations

• Uses annual figures rather than cumulative month-by-month PAYE
• Assumes both jobs run for the full tax year
• Assumes English, Welsh and Northern Irish rates — Scottish taxpayers have their own bands
• Does not model pension contributions, student loans or other code adjustments
• Does not handle three or more employments
• Does not model self-employment alongside employment
• Not tax advice — check your codes through a personal tax account

Questions people ask about this in United Kingdom