Second JOb & Tax calculator

lynzpower

hi there
Im looking at getting a second job to boost my income, although I wonder whether its worth it once the tax & NI come out. I'll get 2500 per year ( saturdays only) and im on code 438L ( i think!) earning 25k per year.

Are there any on line calculators I can use to work this out?

Thanking you
Lynz
x

exil

No need for a calculator when you have MSE!

Gross £2500

tax at 22%. £550.

NI at 11% (assume contracted out). £275.

Assume no tax credit involved, no housing or council tax benefit.

Money left = £2500-825 = £1675.

Minus expenses of getting to work, lunch etc - fill in your own amount.

In short, the marginal tax rate (the tax you pay on the next £ of income) is 33p in the £ from about 25k up to about 32k when it falls to 23p (NI rate goes
down to 1%). It then goes up to 41% at about 36k.

lynzpower

Wow thanks so much for that !

I dont know if I should bother then as 30-odd quid for a full day seems a bit, well, small.

Depends how desperate i am I guess!

birdie53

As a related post, anyone wishing to check their Income tax and NI contributions can check it here

Quite useful if you want to see how much more/less tax you'd pay if your salary or tax code changes

FatJock

Hi,

Not sure if this is of use to anyone but my work have told me that the 40% tax band kicks in at £37,250. You earn anything over this amount and you'll pay 405 on it.

cheers,
FatJock

exil

The correct figure forthe 40% band in 2005-6 is 4895+31400=36295 (but if you pay pension contribs these are taken off first).

Aark

Gross £2500

tax at 22%. £550.

NI at 11% (assume contracted out). £275

There would be no NICs on £2,500 gross spread evenly across a tax year, as it is less than the Earnings Threshold (£4,895). Therefore net pay = £2,500 - £550 = £1,950.

isasmurf

exil wrote:

NI at 11% (assume contracted out). £275.

I think you meant assume contracted in.

However, to the OP assuming your £2,500 is equally distributed throughout the year, you won't pay National Insurance on this employment. NI is treated separately for each job - you get an allowance for each employment, and so as long as you earn less than £97 a week in this second job then you won't pay any NI.

birdie53

Aark wrote:

There would be no NICs on £2,500 gross spread evenly across a tax year, as it is less than the Earnings Threshold (£4,895). Therefore net pay = £2,500 - £550 = £1,950.

This is true Aark, but this is only the case if it's your sole income. Lynzpower says this would be second income, in which case it attracts full NI & Tax because the allowances are taken up by the first income.

Isasmurf wrote:

NI is treated separately for each job - you get an allowance for each employment

Not sure if this is true, my wife has two jobs and she was told by her tax office that the full NIC allowance is attributed to the primary income, she can however 'split' the allowance between the two jobs, but to be honest the bottom line from the two jobs works out the same.

Aark

This is true Aark, but this is only the case if it's your sole income. Lynzpower says this would be second income, in which case it attracts full NI & Tax because the allowances are taken up by the first income.

From Employer's Further Guide to PAYE and NICs (http://www.hmrc.gov.uk/guidance/cwg2.pdf):-

65 An employee has two or more jobs

with different employers and each

one pays the employee

If an employee has another job or jobs with a

different employer or employers, work out NICs in

the normal way on the earnings you pay the

employee. Ignore the payments made to the

employee in the other job(s).