tax on a second job?

PaisleyPPL

have just agreed to take on a second job ,to help my partner and me cope with our finances .Im a full time student ,work part time for NHS and i am now going to take on a second job ,just wondering if anyone knows how much i would be taxed on a second job ?

never-in-doubt

maybe 25%? Its usually base rate tax but may have changed recently...

see here: http://www.hmrc.gov.uk/incometax/check-multiple-codes.htm

and here for rates: http://www.hmrc.gov.uk/rates/it.htm

Tixy

Hi

It'll be 20% tax on your second job. Your personal allowances (tax free bit) will be on your first job, so assuming you are not earning above £43k in total per year (!) then you'll be a basic tax payer.

With regards to NI, you would only have to pay this on your second job in any week that you earn more than £110 just from your second job. (if you are paid monthly, then you'd have to earn £476 from the second job before you paid NI.)

PaisleyPPL

thanks tixy thats really helpful

never-in-doubt

Tixy wrote: »

Hi

It'll be 20% tax on your second job. Your personal allowances (tax free bit) will be on your first job, so assuming you are not earning above £43k in total per year (!) then you'll be a basic tax payer.

With regards to NI, you would only have to pay this on your second job in any week that you earn more than £110 just from your second job. (if you are paid monthly, then you'd have to earn £476 from the second job before you paid NI.)

Morning Tixy.

Thanks for clarifying - my second job shows BR(25) next to my tax code - any idea what that means then? I earn a bit more than the figures you quoted and usually pay higher rate on first income anyway..... Basically, I walk away with around 50% of my salary - maybe I should query this with HMRC? :eek:

Tixy

Hi NID

BR usually means basic rate tax i.e 20% with no allowances deducted, I haven't come across BR (25) as a code but I'd guess you are paying 40% tax on your second job + and NI of 11% on anything over the £110 weekly/£486 monthly. So that probably does equate to around 50%

Tax is worked out cumulatively over all your income (and over the whole year) but NI is worked out individually for each job and each pay period.

If all your income came from one job you would probably pass less overall in terms of NI (as anything over £844 pw (£43,888 pa) only has NI at 1%)

never-in-doubt

Tixy wrote: »

Hi NID

BR usually means basic rate tax i.e 20% with no allowances deducted, I haven't come across BR (25) as a code but I'd guess you are paying 40% tax on your second job + and NI of 11% on anything over the £110 weekly/£486 monthly. So that probably does equate to around 50%

Tax is worked out cumulatively over all your income (and over the whole year) but NI is worked out individually for each job and each pay period.

If all your income came from one job you would probably pass less overall in terms of NI (as anything over £844 pw (£43,888 pa) only has NI at 1%)

Thanks for explaining Tixy :T:T- makes sense now. I'll check my payslips and see the exact tax codes and check with employer / HMRC :D:p

Tixy

Worth a check. After all HMRC send out lots of wrong tax codes each year.

Its also worth checking after 5April whether the total amount of tax you have been deducted is correct across both jobs, even if you are not required to complete a tax return.
Sometimes when you have 2 jobs it can go slightly wrong if for example you start earning less on the first job you could pay too much at 40%

DarkConvict

My job was taxed at 603L, when it should have been BR. So i understand them a little more now since to having to work out the reason for the tax bill.

1st Income with tax code is a 'normal' taxcode.
2nd and further Incomes are taxed at BR (20%).

Then at the end of the year, you work out how much tax you have paid, and how much tax you should have paid (total income split between the 0%, 20%, 40% and 50% bands)

never-in-doubt

I thought that both my jobs should be 40% - I should get more than £40k from each employer (never do though, nearer £37k from each) and would be gutted if I chase things only to be told to pay more - that's why I left it cos I thought I was better off on 25% or whatever it means!!

Maybe i'll have to check it out....... ?? grrrr

Tixy

Okay

You should be taxed on your total salary (total taxable income).

Most people have a personal allowance of £6475 per year - you pay no tax on this amount. This forms the basis of a 'standard' tax code of 647L of your first job.
Some people has a slightly different tax code because of benefits they may receive or various other reasons, therefore they may get slightly more or less of a tax free band (a code 405L, means you can only earn £4055 before you pay tax because you have benefits from your employer of £2420, or it may mean you already owe the revenue a little money from the previous year.
DC - yours was 603L is the 08-09 tax year as the standard limit then was £6035.

On the next £37,400 per year you pay 20% tax, on a PAYE scheme effectivley they pro-rata this to £3117 per month at 20% (but tax is still worked out cumulatively)

So for most people they start paying 40% tax at £43,875. (6475+37400)
Anything above that is 40%.

If NID has 2 jobs both above £43k then he uses his personal allowance and all his basic rate tax band within job 1. So all of job 2 has to be taxed at 40%.

NID as your jobs are actually under £43k then a little bit of your 22% tax code should be available on your second income. This is where an end of year check is essential.

HTH