Why second jobs are taxed differently

Your personal allowance (£12,570 in 2025/26) can only be applied to one income source — it’s allocated to your main job by default. Your second employer has no way of knowing how much of the basic rate band you’ve already used, so HMRC typically issues a BR tax code, meaning all income from the second job is taxed at 20% flat with no personal allowance.

If your combined income already exceeds £50,270, a D0 code is used instead — all second-job income taxed at 40% flat. Neither code accounts for NI, which is calculated separately at each employer.

2025/26 Tax Code Cheat Sheet

BR: All income taxed at 20%, no personal allowance used  ·  D0: All income taxed at 40%  ·  D1: All income at 45%  ·  NT: No tax (rare)  ·  To get a corrected code splitting your allowance, contact HMRC on 0300 200 3300 or update via your Personal Tax Account online.

Are you being overtaxed on your second job?

The BR code is often wrong. If your main salary plus second income keeps you within the basic rate band (under £50,270 combined), you’re only ever liable for 20% tax on the second income anyway — so BR produces the right result. But if your main salary leaves you in a 40% band, BR (taxing the second income at only 20%) will undertax you, causing a bill at year end.

Conversely, if your combined income is below £50,270 and HMRC issues a D0 code (40%) in error, you are being overtaxed and should contact HMRC to correct it — and claim a refund via Self Assessment.

Frequently asked questions

Do I pay NI on a second job?
Yes — but each employer calculates NI independently. Each job has its own £12,570 Primary Threshold (the point above which employee NI is charged). So if your second job pays below £12,570 per year, no NI is due on it — even if your main job is well above the threshold. This means second jobs are often NI-efficient for part-time or low-paid additional work. If your combined earnings from both jobs exceed the Upper Earnings Limit (£50,270), HMRC will reconcile after the year end and may refund excess NI paid.
Do I need to do Self Assessment with a second job?
Yes — if your second income is self-employed/freelance, you must register for Self Assessment and file a tax return each year. If it’s PAYE employment, Self Assessment may still be needed if your combined income exceeds £100,000, or if you have untaxed income over £2,500, or if you owe more than £3,000 in tax that can’t be collected via PAYE adjustment. When in doubt, register — HMRC can penalise you for failing to declare income even if no tax is owed.
How do I update my tax code for a second job?
Log in to your HMRC Personal Tax Account (at gov.uk/personal-tax-account), where you can see and update your tax codes. Alternatively, call HMRC on 0300 200 3300. You can request HMRC allocates part of your personal allowance to a second job, or adjust to reflect your actual tax liability across both. At year end, HMRC sends a P800 reconciliation — if you’ve overpaid, a refund is issued automatically; if you’ve underpaid, HMRC will collect via a tax code adjustment in the following year.