Starting a Second Job in the UK — Tax Guide (2026/27)

Starting a second job is increasingly common in the UK — whether for extra income, career development, or building a side business alongside employment. The tax rules are straightforward once you understand them, but there are a few traps to know about in advance.

Income Tax on Two Jobs: The Basics

The UK’s personal allowance (£12,570 in 2026/27) is normally allocated to one job — typically your primary employment. What this means in practice:

• Job 1 (primary): Taxed using your normal tax code (1257L). First £12,570 is tax-free; income above it is taxed at 20% (up to £50,270) and 40% above that.
• Job 2 (secondary): Usually operates on a BR code — all earnings taxed at 20% from the first pound, because you’ve used your personal allowance on job 1.

You do not pay more income tax in total by having two jobs. The total tax on £30,000 income is the same whether it comes from one employer or two. The difference is how it’s collected — job 2 gets no personal allowance, so you see more deducted there.

Your Tax Code at Each Employer

HMRC may also assign D1 (45% additional rate) to a second job if all your first job income is above the higher rate threshold.

Splitting the Personal Allowance

If your second job has higher earnings than your first, you can request that HMRC split your personal allowance between the two employers. Contact HMRC at 0300 200 3300 or log into your Personal Tax Account at gov.uk.

For example: first job pays £8,000 and second pays £30,000. It makes sense to apply the personal allowance mostly to the second job. HMRC will issue both employers a new tax code.

National Insurance on Two Jobs: The Complication

Unlike income tax, NI is calculated per employer, not across all income. This means:

• Each employer applies NI thresholds independently to your earnings from them
• If each job pays above the NI Primary Threshold (£12,570/year), you pay NI on both
• You may end up paying more NI across two jobs than you would on the same combined salary from one employer

Example

Wait — in this case, having two jobs actually means paying less NI than a single job equivalent, because each employer applies the threshold separately, and both salaries are relatively low.

However, in the opposite scenario where one job is high-earning:

Here, NI on job 2 might be higher than it would be if both incomes were combined and only 2% applied to the lower-rate job 2’s earnings. This is the NI overpayment scenario.

Applying to Defer NI on One Job

If you already have one job where your earnings exceed the Upper Earnings Limit (£50,270/year), you can apply to defer NI contributions on your second job to avoid overpaying. Complete form CA72A (available from HMRC) before the tax year begins.

Deferred NI is sorted at the end of the tax year — HMRC reconciles what you owe and issues a demand if any NI was underpaid, or a refund if you overpaid.

The Second Job and Child Benefit

If you currently receive Child Benefit, be aware that the High Income Child Benefit Charge (HICBC) is based on your total adjusted net income from all sources — not just one job. A second income can push you over the £60,000 threshold where the charge begins.

At £80,000 combined income, all Child Benefit is effectively repaid via Self Assessment. Make sure you’re registered for Self Assessment if this applies.

Student Loan Deductions on Two Jobs

Student loan repayments are deducted by each employer separately, based on that employer’s knowledge of your pay. This can result in:

• Underpayment (if each job’s salary is below the repayment threshold individually but combined they’re above it)
• Overpayment (if both employers deduct but combined deductions exceed what you’d actually owe)

HMRC reconciles this at the end of the tax year when your total income is known. Any overpayment is refunded; any underpayment is collected via Self Assessment.

If your combined income from two jobs will clearly exceed the threshold, tell both employers your Plan type and they’ll both deduct. The overpayment will be sorted at year end.

Do You Need to Complete a Self Assessment?

You may need to complete a Self Assessment return if:

• Combined income from both jobs exceeds £100,000 (personal allowance taper)
• You have untaxed income (rental income, freelance, savings interest above PSA)
• You receive income from abroad
• You receive Child Benefit and your income exceeds £60,000
• HMRC writes to you asking you to submit one

If your combined income is under £100,000, comes entirely from PAYE employment, and you have no other income, you generally don’t need to file Self Assessment. HMRC’s tax coding system handles the adjustments.

PAYE Reconciliation: How It’s Sorted at Year End

Even if your tax is slightly off during the year due to two separate PAYE streams, HMRC reconciles it annually:

• After the tax year ends (April 5), HMRC reviews all PAYE income
• If you’ve underpaid, you receive a P800 with a tax demand or an adjustment to your tax code
• If you’ve overpaid, you receive a P800 and a repayment

You can also use your Personal Tax Account (gov.uk/personal-tax-account) to check your position in real time during the tax year.

Practical Steps When Starting a Second Job

1. Complete the Starter Checklist for your second employer — tick Statement C (“This is now my only job but since 6 April I have had another job”)
2. Check the tax code on your first payslip from job 2 — it should be BR (or D0 if you’re a higher-rate taxpayer on job 1)
3. Notify HMRC if you want to split your personal allowance differently
4. Check NI deductions — if both jobs pay above the Primary Threshold, you may want to apply for deferment if job 1 earnings already exceed the Upper Earnings Limit
5. Update any benefits claims — report the additional income within one month

Related Guides

• How to Read a Payslip — understanding BR codes and deductions
• Side Hustle Tax Guide — if your second income is self-employed rather than PAYE
• How to Increase Your Income — routes to additional income
• Self Assessment Guide — if you need to file a return for combined income