Tax on a second income

secondtoughest

Is the tax on your second job a higher rate than your first job or does it just depend on the total amount of money you earn in a tax year?

I'm trying to decide if it's better to work overtime in my current job or get a second job. The 'overtime/second job money' is going to go into a saving account so it's not essential day to day money and therefore if I get it now or in April, it doesn't bother me.

Thanks!

darich

Your tax is calculated on your total income.

So your second job may be a different rate depending on the salaray of your first job. By that, i mean that if your 1st salary is immediately below the threshold for the next level of tax, then your 2nd salary would take you through it and you'd pay the higher rate on your 2nd salary.

it would only be on the second salary because the higher rate is only applied to the earnings above the threshold ie only the 2nd salary.

EDIT : I'd imagine that in taking on a 2nd job you won't be bordering on the higher tax rate of 40% which i believe kicks in somewhere in the high 30's salary wise. That being the case, you'll pay the same tax rate on all the money you earn.

secondtoughest

Hmm. I'll have to see how much overtime my work can actually give me but in the short term it's very flexible so I might just stick to that. Plus it has the added bonus of helping out my own company! My overtime rate is around £16 p/h and it's not many places I'd get a part job with that salary.

Cheers for the advice : )

EDIT: 40% tax on anything over £34,600. I thought it was higher than that.. yikes.

jessicamb

Hi secondtoughest

I think your thread would sit better in the tax board so I will move it over there.

MissG_2

Pardon me for sounding thick but if a friend of mine earns £19000 in her main job before tax and profit of £15000 on own part time business would this mean they stay on the lower tax band or would expenses like advertising/cost's etc be taken into account and take it to the higher tax band?

Or put it simply, main salary is £19000, then part time business makes approx £20000 with £5000 expenses. Meaning top line = £34000.

What tax band would this fall into?

Any help is much appreciated.

Regards

jem16

secondtoughest wrote: »

EDIT: 40% tax on anything over £34,600. I thought it was higher than that.. yikes.

The £34,600 is taxable income after the personal allowance of £5225 has been deducted. So to be in the higher rate tax barcket you have to be earning at least £39,825.

jem16

MissG wrote: »

Pardon me for sounding thick but if a friend of mine earns £19000 in her main job before tax and profit of £15000 on own part time business would this mean they stay on the lower tax band or would expenses like advertising/cost's etc be taken into account and take it to the higher tax band?

Or put it simply, main salary is £19000, then part time business makes approx £20000 with £5000 expenses. Meaning top line = £34000.

What tax band would this fall into?

Any help is much appreciated.

Regards

It's in basic rate tax band.

You have to have income over £39,825 to be in higher rate.