tax on second income

depressingdebt

Wondering if its worth taking on an extra job, if the tax on a second income is too high there would be no point. What are the thresholds and tax percentages?

derrick

depressingdebt wrote: »

Wondering if its worth taking on an extra job, if the tax on a second income is too high there would be no point. What are the thresholds and tax percentages?

http://www.hmrc.gov.uk/rates/it.htm

GernalSherman

The amount of tax you would pay depends on how much you are earning in your present job.

If you total employment income falls in the basic tax rate bracket ie 2231-34600 it's 22% and above 34600 it's 40%.

So if you are consuming your basic rate band already, your second job will cost you more.

wayoflife

depressingdebt wrote: »

Wondering if its worth taking on an extra job, if the tax on a second income is too high there would be no point. What are the thresholds and tax percentages?

obviously look at the links provided by the regulars above....

I have two jobs and it depends what you would call worth it...

if your first job you earn under 40k then its worth doing it... you will be taxed at the basic rate (22%) so its up to you

jem16

GernalSherman wrote: »

If you total employment income falls in the basic tax rate bracket ie 2231-34600 it's 22% and above 34600 it's 40%.

You need to remember that the figures quoted above are taxable income AFTER the personal allowance of £5,225.

So basically you have to earn £39,825 before you are liable to higher rate tax.

GernalSherman

jem16 wrote: »

You need to remember that the figures quoted above are taxable income AFTER the personal allowance of £5,225.

So basically you have to earn £39,825 before you are liable to higher rate tax.

Exactly, calculations above are done after the PA deduction. Thanks Jem16 for clarity

stevey2005

Having a 2nd job is crap. I think paying tax on your first income should be enough. Your second income is usually lower than your first and you end up paying over double the tax than what you pay on your first income. :mad:

jem16

stevey2005 wrote: »

Having a 2nd job is crap. I think paying tax on your first income should be enough. Your second income is usually lower than your first and you end up paying over double the tax than what you pay on your first income. :mad:

That's simply because your tax code and therefore tax-free allowances are attached to your first income. No allowances are normally attached to your 2nd income so it appears that you are paying more.

You will pay no more tax than if you had one job earning you £18,000 pa than you would having two jobs with the first earning you £14,000 pa and the second earning you £4,000.

It's your TOTAL income that matters for income tax, not how many jobs you have.

swanny65

jem16 wrote: »

That's simply because your tax code and therefore tax-free allowances are attached to your first income. No allowances are normally attached to your 2nd income so it appears that you are paying more.

You will pay no more tax than if you had one job earning you £18,000 pa than you would having two jobs with the first earning you £14,000 pa and the second earning you £4,000.

It's your TOTAL income that matters for income tax, not how many jobs you have.

.....and you get the added advantage that if the second job is below the Lower Earnings Limit for NI then no NI is payable - so in the above example you would actually be sightly better off with the two jobs.

kbm

I was discussing this last night....I have just accepted a full time job which i due to start a week on Monday (i was a student), I also have a job in a pub where i do between 3 and 8 hours a week but i was wondering whether it will be worth keeping the pub job once i have started my full time job!!

proevofanatik

i work in a timber yard and earn £14,000 per year. and i am thinking of opening an ebay shop. if i were to earn less than the £39,000 with both my job and ebay shop combined would i still pay the same percentage rate of tax and national insurance as i would with my timber yard job alone?

also if i were to open an ebay shop would i have to know anything else about tax deductions? do i have to account for silly things like electricity bills and hair cuts? the reason im asking is i heard that someone had a huge tax bill at the end of tyhe year because he never counted in things like hair cuts. and it all amounted up at the end of the year.