If you have two jobs, does the second job get taxed more at all, even if the salary of both jobs combined is less than 34k?
(Mr M.Y., 16 March 2011)
A.
Many people seem to think that second jobs are taxed at a higher rate. We have previously received questions regarding the tax treatment of a part-time job if the worker is drawing a private pension (see Is It Worth Taking a Part-Time Job On A Pension?), and much the same principle applies in your case. There is no separate rate of tax for a second job, although this is likely to affect your non-taxable personal allowances, and your tax code.
Non-taxable Personal Allowance
In the first instance, it is important to note that you have one non-taxable personal allowance per year, regardless of the number of jobs you have. For the 2011-12 tax year, this is set at £7,475 if you are under 65 years old. This non-taxable allowance will apply to just one of your jobs. As such, you will probably receive your allowance on your first job, meaning that the first £7,475 earned from this source will be free from tax. However, once you have used that allowance, all other income will be taxed at the normal rate.
You have mentioned that your combined salary is less than £34,000. For the 2011-12 tax year, the earnings threshold for the basic tax bracket is £35,000. As such, if your total income is less than this, it will all attract income tax at a rate of 20% for this tax year. You should also remember that you will almost certainly be liable for National Insurance Contributions, which will be paid at a rate of 12% for earnings above £139 per week. For example, if you earn £150 per week you would pay 12% of £11.
Finally, you are likely to find that your tax code changes if you take on a second job. If you will continue to be a basic rate tax payer, your code will change to BR for ‘basic rate’, and will continue to be followed by a number that outlines the way in which your income is taxed. For more information on understanding your tax code, you may wish to read What Is My Tax Code?
I am currently earning £37000 working as an engineer in a small electronics company. A previous employer has asked me to do some work in the evenings for them. It's a one off job worth about £1800. Can they pay this money into my bank account ? Once they have done this I would inform the tax office and expect a seperate bill. Is this the right way to do it?
alan - 1 February 2012 @ 6:51 PM
I have just started a second job but I work more hours for my new job (21 a week at around £8 an hour) than my current(8-12 a week on £6.08 an hour). Which job is classed as my second, the one I work the most contracted hours for or the job I joined last?
lellybee - 25 January 2012 @ 4:49 PM
I am starting a new job in Jan where I will be earning £12,250 per annum and my employer have asked me to stay on for one day a week,besides my full time job,what would I be taxed on the part-time job and would it be worth me staying on for the one day or would I be working for nothing?
chezpeers - 13 December 2011 @ 6:21 PM
I work part time 30hrs and I work extra shifts as a second job which I am currently paying pension contributions on. Is it worth payingthese pension contributions on my second job?
Sarah - 7 September 2011 @ 4:23 PM
Hi! I currently earn 24k a year and I am looking to go travelling at the start of November I have a part time job offer of 3 hrs a week at 10p/h. I am wondering if it would be benifical for me to take the job or not?My friend thinks that I will get taxed 50% on the part time job.Is this true?CheersSte
stebeery21 - 1 September 2011 @ 6:05 PM
To pay National Insurance and tax on your second income you will need to complete a self assessment tax return with HM Revenue & Customs (HMRC). For more information, go to the Directgov or HMRC website.
TheTaxGuide - 23 June 2011 @ 12:31 PM
I work full time and earn £18,000 a year, I also work for an agency who find me occasional pharmacy locum work, this rate varies from around £12/13per hour of this I have to pay my own tax and NI, I am new to this and I am wondering how I go about it, as it is also classed as a second income.
Wills - 22 June 2011 @ 5:52 PM
Hi there I have a full time job at the moment working five days a week average 8/9 hours a day normally take home about 700 a month. I want to get a second job for the other two days I am off but am worried that I will get taxed more on my full time job if I take it on??
