If you have 2 jobs do you pay more tax?

In the UK, it is increasingly popular to have multiple jobs. However, this can mean people are unsure: if you have 2 jobs do you pay more tax? Don’t panic, though; this post will answer all your questions about taxes when it comes to having multiple jobs. 

While having two jobs may potentially push you into a higher income tax bracket, the actual amount of tax you pay will depend on various factors, such as your total income, tax allowances, and any deductions or exemptions you may qualify for. Therefore, it is crucial to consult a tax professional or use online calculators to determine your precise tax liability when working multiple jobs.

If you have 2 jobs do you pay more tax?

If you’re working two jobs, you might be thinking If you have 2 jobs do you pay more tax? The answer to this question depends on your total earnings from both jobs and whether you fall into a higher tax bracket. 

While it is true that having two jobs means you will have two sources of income, the tax you pay will be calculated based on your overall earnings and tax code.

For example, if a person has two part-time jobs that, combined,  earn £15,000 per year and you have a second person who earns £15,000 per year from one job, they will both pay the same amount of tax and national insurance contributions.

It is important to understand that just because you have two jobs, that doesn’t mean you have to pay double the amount of tax. As discussed above, you only pay tax on the combined totals of the two jobs you do.

If you have 2 jobs how does tax work in the UK?

So you decide to get a second job or maybe start a side hustle to make money on the side, but you’re worried about the tax for two jobs. Don’t worry; I’ll explain below.

In the UK, the tax for two jobs can become more complex, so I would always advise that you speak to an accountant as well. The amount of tax you pay will depend on your total income from both jobs as well as any other sources of income you may have.

For example, let’s say you have a part-time job as a cashier earning £10,000 per year and another part-time job as a delivery driver earning £15,000 per year. In this scenario, your total income would be £25,000. The tax you pay will be calculated based on this combined income and the tax brackets and rates that apply to your total earnings. 

How much tax and national insurance would you be paying in this example?

In the UK, the tax and national insurance you would be paying in this example would depend on the tax brackets and rates that apply to your total earnings. As of the 2023/2024 tax year, you would be subject to the basic rate of income tax, which is 20% on earnings between £12,570 and £50,270. 

Assuming your total income of £25,000 falls within this range, you would be paying £5,000 in income tax. Additionally, you would also be liable for national insurance contributions, which for employees earning between £9,568 and £50,270 is 12% of earnings. In this example, your national insurance contributions would amount to £3,000. 

It is important to understand that just because you have two jobs, that doesn’t mean you have to pay double the amount of tax. As discussed above, you only pay tax on the combined totals of the two jobs you do.

What is the tax on a self-employed second job in the UK?

So let’s discuss now what happens if you have a full-time job and work a second job or make money with a side hustle which is self-employed.

The tax on a self-employed second job in the UK works slightly differently compared to having two employed jobs. If you have a self-employed second job, you will need to register as self-employed with HM Revenue and Customs (HMRC) and complete a self-assessment tax return. 

This means you will be responsible for calculating and paying your own taxes and national insurance contributions. The amount of tax you will need to pay on your self-employed second job will depend on your total income from all sources, including your employed job.

How much tax would I pay on a second self-employed job in the UK?

For example, if you have a full-time employed job earning £30,000 per year and a part-time self-employed job earning £10,000 per year, your total income would be £40,000. You would be required to complete a self-assessment tax return and pay tax and national insurance contributions on your entire income of £40,000.

The good news, though, is that you can reduce the amount of tax you pay on your second self-employed job by deducting any allowable expenses related to that job, which is one of the benefits of having a second self-employed job. Allowable expenses can include things like business travel, equipment, and office supplies, which are all the things you need to be able to carry out your second self-employed job.

By keeping track of these expenses and deducting them from your income, you can lower your taxable income and therefore reduce the amount of tax you owe. It’s important to keep accurate records and receipts for these expenses in case of an audit. 

Additionally, it’s a good idea to consult with a tax professional to ensure you are maximising your deductions and staying compliant with HMRC regulations.

For example, if you have a second self-employed job as a freelance graphic designer, you would need to invest in a high-quality computer, design software, and professional subscriptions. These expenses can be deducted from your income, reducing your taxable income.

By keeping track of these expenses and consulting with a tax professional, you can ensure that you are accurately claiming deductions and minimise the amount of tax that is due.

What are the benefits of having two jobs?

So if you are thinking of starting a side hustle or paid employment, you are probably thinking, Is it worth it? Let’s now take a look at the benefits of having two jobs.

1. Increased financial stability: Having two jobs can provide a higher level of income and financial security, as it diversifies your sources of income.

2. Skill development: Working in different industries or roles through two jobs allows you to develop a wider range of skills and experiences, enhancing your overall professional growth.

3. Expanded professional network: Holding two jobs often means interacting with different sets of colleagues and industry professionals, which can lead to increased networking opportunities and potential career advancements.

4. Flexibility in scheduling: Having two jobs can provide more flexibility in scheduling, as you may have the ability to negotiate different hours or work remotely for one of the positions. This can allow for a better work-life balance and the ability to accommodate personal commitments or pursue other interests outside of work.

5. Trial and experience new work opportunities: Having two jobs allows individuals to trial new work opportunities in different industries or fields, possibly on a part-time basis, without committing solely to the job before you know if they are going to enjoy the role. 

Do I need to tell HMRC if I get a second job?

If you are planning on starting a second job, you might be thinking, do I need to tell HMRC? Let’s go through a few scenarios:

You are employed in both jobs:

If you decide to work part-time, for example, with Tesco and Sainsbury’s, you do not have to tell HMRC, as both employers (Tesco and Sainsbury’s) will do this for you.

You are employed in your first job and self-employed in your second job:

If this sounds like you, you will need to tell HMRC that you are self-employed and then pay any tax or national insurance contributions on the income you earn from your second self-employed job. If this sounds a little daunting, it would be a good idea to speak to an accountant to help answer any questions you may have.

Do I have to declare my second job to my employer?

In the United Kingdom, you don’t have to by law inform your employer of your second job. However, it is always a good idea to review your employment contract or chat with your human resources department to ensure that there are no conflicts of interest or rules on having a second job. It is also critical to be open and honest with your employer if your secondary employment may interfere with your availability or performance at your first work.

Hopefully that has answered any questions you have about if you have 2 jobs do you pay more tax, and has maybe inspired you to take on additional work or maybe to start a side hustle as a way to make money on the side.

Disclaimer

We do not provide accounting, tax, business, or legal advice, and this article has been created for informational purposes only. You should consult your own professional tax advisors for advice and support.