Can I Have Two Jobs Without Paying Too Much Tax?

Introduction

It is becoming increasingly common for people in the UK to have more than one job, whether to earn extra income, build experience, or balance part-time roles. However, one of the biggest concerns people have is whether having two jobs means they will automatically pay more tax.

The good news is that you can have two jobs without paying more tax than you owe. The key is understanding how tax codes work and ensuring HMRC has accurate information about both employments. This article explains how taxation works when you have multiple jobs, how to manage your tax codes correctly, and what to do if you think you are overpaying.

How Income Tax Works in the UK

In the UK, everyone has a personal allowance — the amount of income you can earn before paying tax. For the 2024 25 tax year, this allowance is £12,570.

Once your income goes above that threshold, you pay Income Tax on the remainder at the following basic rates:

• 20% on income between £12,571 and £50,270

• 40% on income between £50,271 and £125,140

• 45% on income above £125,140

These rates apply to your total income across all jobs. You do not get a separate personal allowance for each job.

How Tax Is Calculated When You Have Two Jobs

When you have more than one job, HMRC assigns a tax code to each one. This determines how much tax-free income you receive from each employer.

Usually, your main job (the one you earn the most from) gets your full personal allowance. This job will have a tax code such as 1257L, meaning you receive the full £12,570 tax-free allowance there.

Your second job will typically have a BR (Basic Rate) or D0/D1 tax code:

• BR (Basic Rate): All income from your second job is taxed at 20%.

• D0: All income from the second job is taxed at 40%.

• D1: All income is taxed at 45%.

These codes ensure you pay tax correctly across both jobs.

Example of How Two Jobs Are Taxed

Imagine you have two jobs:

• Job A pays £24,000 per year.

• Job B pays £8,000 per year.

HMRC will usually assign your personal allowance (£12,570) to Job A. You will then pay tax on £11,430 of that salary at 20%.

Job B will likely have a BR tax code, meaning all £8,000 is taxed at 20%. Although you are paying tax on all of Job B’s income, you are not paying extra overall — you are just being taxed on the total amount of money you earn across both jobs.

If you earn less than the personal allowance in both jobs combined, you can ask HMRC to split your allowance between employers to avoid overpaying.

How to Check Your Tax Codes

Your tax codes are shown on your payslips or in your Personal Tax Account on the HMRC website. You should check that:

• Your main job has your full personal allowance.

• Your second job is correctly coded (usually BR, D0, or D1).

If you think your tax codes are wrong, contact HMRC to have them corrected. Providing details of both employers and expected income helps them assign the right codes.

What Happens If You Start or Leave a Second Job

When you start a new job, your new employer will ask for a P45 from your previous or existing job. This tells them your current tax position. If you do not have one (for example, if you already have another job), they will ask you to complete a starter checklist to decide the correct tax code.

If you leave one of your jobs, your employer will issue a P45 showing how much you have earned and paid in tax so far that year. Pass this to your remaining employer or keep it for your records.

Common Situations and How to Handle Them

1. Both Jobs Are Part-Time

If neither job earns above the personal allowance, you may be paying too much tax if your allowance is only applied to one job. Contact HMRC and request that your allowance be split between employers.

2. One Job Is Temporary or Seasonal

If you have a temporary second job (for example, during holidays), it might still use a BR code. This is normal and ensures correct taxation, though you might get a refund later if you overpay.

3. You Receive Benefits or Pensions

If you get a pension or other taxable benefits alongside employment income, HMRC may adjust your tax codes so that the right amount of tax is collected across all sources of income.

Can I End Up Paying Too Much Tax?

Yes, it can happen, especially if:

• Both employers apply emergency or BR tax codes

• You change jobs and HMRC is not updated promptly

• You earn less than expected during the year

If you think you have paid too much tax, you can claim a refund from HMRC.

How to Claim a Tax Refund

If you overpay tax, HMRC usually refunds it automatically at the end of the tax year. However, you can request a refund sooner by:

• Logging into your Personal Tax Account on the HMRC website

• Calling HMRC’s Income Tax helpline and explaining your situation

• Sending your P45 or P60 forms for manual review

Refunds are typically paid directly into your bank account within a few weeks.

Example Scenario

Emma works as a part-time administrator earning £10,000 per year and also has a weekend job earning £6,000. At first, both jobs were given BR tax codes, meaning all income was taxed.

Emma contacted HMRC and requested her personal allowance be split between the two employers. HMRC issued new codes so her first job used £8,000 of the allowance and her second job used £4,570. Her tax deductions reduced immediately, and she avoided overpaying for the rest of the year.

Tips to Avoid Paying Too Much Tax

• Always give your new employer your P45 when starting a job.

• Check your tax codes regularly on payslips or through your HMRC account.

• Inform HMRC of any changes to your income or employment.

• Keep your P60s and payslips for your records.

• Speak to an accountant if you have complex income or several jobs.

The Role of an Accountant

An accountant can help ensure you are not overpaying tax when juggling multiple jobs. They can:

• Check that your tax codes are correct

• Calculate whether you are due a refund

• Help complete forms or contact HMRC on your behalf

• Advise you on tax-efficient ways to manage multiple sources of income

For freelancers or contractors with both employment and self-employment income, an accountant can also help with completing Self Assessment tax returns accurately.

Conclusion

You can absolutely have two jobs without paying too much tax — as long as HMRC has the right information and your tax codes are set up correctly. The PAYE system calculates tax across your total income, so your overall liability will be fair based on your earnings.

Check your tax codes regularly, inform HMRC of changes, and keep your documents organised. If you believe you have overpaid, request a refund or seek professional advice. With a little attention to detail, managing two jobs can be financially rewarding without unexpected tax problems.