Tax when you have two jobs

You pay the same total Income Tax on two jobs as you would on one job paying the combined amount, as long as the tax codes are right. The catch is that you only get one Personal Allowance of £12,570. HMRC normally gives all of it to your main job, and the second job is taxed from the first pound, usually with a BR code at 20 per cent. National Insurance is different: it is worked out on each job separately, which can mean you pay less of it than someone earning the same in one job.

How the allowance is shared

HMRC treats the job that pays most as your main one and gives it a code such as 1257L. Every other job gets a code with no allowance:

Code on the second job	What it does	Usual reason
BR	Taxes all pay at 20%	Total income stays within the basic rate band
D0	Taxes all pay at 40%	Main job already pays more than £50,270
D1	Taxes all pay at 45%	Total income over £125,140
0T	No allowance, taxed through the bands	HMRC does not have enough details

In Scotland the codes start with S, so SBR, SD0, SD1 and so on, and use Scottish rates. In Wales they start with C. The BR tax code guide goes into BR in more detail.

A code such as BR on a second job looks harsh on the payslip, because a £400 month gives £80 of tax straight away. Over the year the total still comes out right, because the allowance has already been used in the main job.

When HMRC splits the allowance

Sometimes the main job pays less than £12,570 a year. A part-time midday supervisor who also does a few shifts as a care worker might earn £9,000 in one job and £6,000 in the other. Giving all the allowance to the first job wastes £3,570 of it, while the second job pays 20 per cent on everything.

In that case HMRC can split the allowance. The main job might get a code covering £9,000 and the second job a code covering the remaining £3,570, so each job uses part of it. You can ask for this through your personal tax account or the HMRC app by updating the expected pay for each job. HMRC then sends new codes to both employers.

A split works best when your hours are steady. If pay in one job goes up and down, as with bank or zero-hours work, the split may need adjusting during the year. Overpaid or underpaid tax that is left at the end of the year is sorted out through a P800.

Swapping which job is the main one

HMRC decides which job is main based on the information employers send. If you take on a new job that pays more, or one job’s hours are cut, the allowance can end up in the smaller job. The result is too much tax on the bigger job, and sometimes a 0T or emergency code there.

Look at both payslips. The one with 1257L, or a similar number followed by L, should be the one paying most. If it is not, tell HMRC which job is main and roughly what each pays. Our page on checking your tax code shows where to look.

National Insurance on two jobs

Each employer works out Class 1 National Insurance on what it pays you, without looking at your other job. Employee NI is 8 per cent on weekly pay above £242 (£1,048 a month), up to £967 a week, and 2 per cent above that.

Say you earn £20,000 a year in your main job and £8,000 in a second job, both paid evenly through the year:

• Main job: NI on £20,000 minus £12,570, so 8 per cent of £7,430, which is £594.40
• Second job: £8,000 is below the £12,570 threshold for that job, so no NI is due

The same £28,000 in a single job would mean NI on £15,430, which is £1,234.40. Income Tax on the two jobs is £1,486 plus £1,600, the same £3,086 that one job would pay.

Each employer applies its own threshold, and that has always been how Class 1 works. If a second job pays below the Lower Earnings Limit of £129 a week, it does not count towards your State Pension record, though the main job usually will. There is more on this in National Insurance explained.

Student loans and second jobs

Student loan repayments are also worked out job by job. If the second job pays less than your plan’s threshold for the pay period, nothing is taken there, even if your total income is above the yearly threshold. HMRC looks at total income at year end only if you file Self Assessment. Our guide to student loan repayments has the thresholds.

NHS bank work and supply

Many NHS staff take bank shifts with the same trust they work for. Where the bank work is paid by the same employer through the same payroll, it is often added to your normal pay and taxed under your main code. Where it is a separate employment record, or paid through a different trust, it is taxed as a second job, usually on BR. Our page on tax on NHS bank shifts covers this in detail.

Supply teachers working through more than one agency face the same issue. Each agency is a separate employer for PAYE, so only one should have your allowance. If two agencies are each using 1257L, you will be underpaying, and the shortfall usually comes back as a P800 bill or a lower code the next year. Updating your details with HMRC as soon as the pattern changes avoids that.