Pillar Guide · Updated May 2026

UK Second Job Tax: How PAYE, BR Codes and NI Really Work in 2025/26

Around 1.2 million people in the UK hold more than one paid job at any time, according to ONS Labour Force Survey data. The total tax you owe on combined earnings is exactly the same as if it came from one employer — but PAYE collects it in a way that almost always produces a refund or a bill at year-end. The Personal Allowance of £12,570 is attached to your main job; your second job receives a BR (Basic Rate) code that taxes every pound at 20% from the first penny. National Insurance, by contrast, is assessed separately by each employer with its own £242/week Primary Threshold, which often leaves second-job pay completely NI-free. This pillar guide explains every meaningful aspect for 2025/26: code mechanics, NI per employment, how to spot over- and under-payment, how to fix wrong codes, when Self Assessment kicks in, and the £1,000 trading allowance for genuine side hustles.

Last updated: 24 May 2026Last reviewed: 24 May 2026How we verify

How PAYE Handles Multiple Jobs

Pay As You Earn (PAYE) is the UK's real-time payroll tax system. Each employer receives a tax code from HMRC for every employee and applies it to each pay packet, deducting income tax and Class 1 National Insurance before paying the net amount. The code packs three pieces of information: how much Personal Allowance (PA) to give, whether to operate on a cumulative or non-cumulative basis, and which rate applies above the allowance.

When you have only one job the code is normally 1257L, which gives the full £12,570 PA cumulatively across the tax year. Your employer's payroll software calculates year-to-date pay, subtracts year-to-date PA, and taxes only the difference. Smooth and self-correcting: a slow month evens out a busy month. When a second job appears, HMRC has a problem. The PA cannot be applied twice without doubling it. So HMRC's default is to give the entire PA to one job (typically the higher-paid or longer-held one, identified through your P46/new starter declaration), and to issue a BR code to the second. BR tells the second employer: tax every pound at the basic rate of 20% with no allowance, period.

This works neatly when your main job pays £30,000 and your second pays £8,000 — the main job uses the full PA, and the second job's 20% deduction is broadly correct because the combined income (£38,000) sits comfortably in basic rate territory. It breaks down when the income split is unbalanced (main job pays less than £12,570, wasting some PA) or when combined income crosses the £50,270 higher rate threshold (BR under-collects the extra 20%).

The BR Code in Detail

BR = Basic Rate. The employer takes 20% of every pound paid, with no allowance and no cumulative reset across the year. Mechanically simple. The variants you may also see:

Code	Rate applied	Typical use
BR	20% flat	Second job, basic-rate combined
D0	40% flat	Second job, higher-rate combined
D1	45% flat	Second job, additional-rate combined
0T	Marginal band, no PA	No P45, emergency, post-redundancy
NT	0% (no tax)	Non-resident, special HMRC ruling

D0 is the higher-rate sibling of BR. HMRC will issue D0 instead of BR for your second job if your main job is already paying you into higher-rate territory (i.e. main-job earnings exceed £50,270 in the year). D0 takes 40% of every pound from the second job, on the assumption that all of that second-job income is in higher rate territory. D1 (45%) is the equivalent for additional-rate combined earners (above £125,140).

You can confirm what code your second employer is using by checking the “Tax code” line on your payslip. If it says BR or D0/D1, your employer is treating the entire job's pay as a flat-rate slice. If it says any cumulative L code (e.g. 700L) you have requested a Personal Allowance split — see the dedicated section below. If it says 0T or 0T W1/M1 your second employer received no specific direction from HMRC and is operating an emergency code that nearly always over-collects; update your details with HMRC quickly to get a proper BR or split code issued.

National Insurance is Per Employment

Class 1 NI works differently from income tax: every employer assesses its own NI independently, applying the full Primary Threshold (PT) to its own pay. There is no aggregation across employers for ordinary employees.

For 2025/26 the relevant figures: Primary Threshold £242/week (£1,048/month, £12,570 annual equivalent). NI rate above PT and up to the Upper Earnings Limit of £967/week: 8%. NI rate above UEL: 2%. Each employer applies these to its own pay week-by-week or month-by-month, treating the worker as if they had a single employment.

The practical implication for a two-job worker: if neither job's individual pay crosses the PT, you pay no NI on either, even though your combined pay might. A warehouse worker paid £180/week from each of two employers (£360/week combined) pays no NI at all, whereas the same £360/week from a single employer would attract NI on the £118 above PT (about £9.44/week, or £491/year).

The reverse is also possible. A higher-paid worker holding two jobs each above the UEL pays 8% NI in each employment up to its own UEL — potentially overpaying the annual maximum NI. There is an annual maximum NI for Class 1 contributors; if you exceed it, you can apply to HMRC for a refund or for “deferment” in future years (form CA72A). The annual maximum check is rarely needed for combined incomes below £100,000 but matters for very high earners with multiple posts.

0T and Emergency Codes on a Second Job

The 0T code is what your new second employer uses when HMRC has not yet issued a proper code — typically because you started without a P45 or because HMRC's records still show only your previous (now closed) employment. 0T applies the marginal band: 20% up to £50,270 within the period, then 40% to £125,140, then 45%. It assumes no Personal Allowance, but unlike BR it does step up to higher rate within the same pay packet if the gross is large enough.

0T is especially punishing on irregular or one-off pay (a single large payment will be treated as if it represented a full year's earnings, taxed at the marginal band that level implies). It is common to see new starters lose 30-40% of their first payslip to 0T deductions, only to recover most of it via P800 a year later. The fix is to give your new employer your P45 from the previous job (if you have one), or to log into the HMRC Personal Tax Account and tell HMRC about the new job. Either path triggers HMRC to issue BR (or D0, or a split L code) within a few days.

The W1/M1/X suffix on a code (e.g. 1257L W1) means “week 1 / month 1 basis” — non-cumulative. Each pay period is treated in isolation, with the PA divided evenly across 52 weeks (12 months). If you started mid-year this avoids a huge refund dump on month one (which would happen if cumulative PA were applied retroactively), but it also means you cannot self-correct mid-year if your pay is uneven. HMRC normally removes the W1/M1 suffix after one or two pay periods once it has up-to-date data.

Why You Over- or Under-Pay Tax with Two Jobs

The two mismatches arise from BR's assumption that 20% is the right rate on every pound of the second job. That assumption holds only when your combined income sits in the basic-rate band AND your main job already uses the full PA. Both conditions must be true.

Over-paymenthappens when your main job earns less than £12,570 (the full PA), so part of the PA is unused. BR taxes the second job's first pound at 20% — but if some of your PA is still available, that first pound of the second job arguably ought to be tax-free. Worked through: main £8,000, second £6,000. Code 1257L on main collects no tax (£8k under PA). Code BR on second collects £1,200 (20% × £6,000). Correct total: combined £14,000 minus £12,570 PA = £1,430 taxable at 20% = £286. You have overpaid £914. HMRC's P800 will refund it after April.

Under-paymenthappens when combined income crosses £50,270 into higher-rate territory, but neither single job alone does. Worked through: main £45,000, second £10,000. Code 1257L on main collects £6,486 ((£45k − £12,570) × 20%). Code BR on second collects £2,000 (20% × £10,000). Correct total: £55,000 − £12,570 = £42,430 taxable, of which £37,700 at 20% = £7,540 plus £4,730 at 40% = £1,892, total £9,432. PAYE collected £8,486; under-collection £946. HMRC's P800 will bill it, typically by coded-out adjustment to next year's 1257L (lowering it to ~1163L so the £946 is recovered through £19 less PA per month).

Worked Examples

Two illustrative cases for 2025/26 (England rates; figures rounded):

Element	Case A: £25k + £10k	Case B: £30k + £5k
Main job code	1257L on £25k	1257L on £30k
Main job tax	£2,486	£3,486
Second job code	BR on £10k	BR on £5k
Second job tax	£2,000	£1,000
Combined PAYE tax	£4,486	£4,486
Correct annual tax	£4,486	£4,486
P800 outcome	Nil — balanced	Nil — balanced
Combined NI (Class 1)	£994 (main only)	£1,394 (main only)

In both cases combined income is £35,000 — well within basic-rate territory and the main job's PA is fully used. PAYE balances perfectly. NI is paid only by the main employer because the second job in each case (£10k and £5k) is below the annual NI Primary Threshold of about £12,570 (or roughly £242/week).

Now contrast with a £45k + £10k case. Main job: 1257L on £45k = £6,486 tax. Second job: BR on £10k = £2,000 tax. Combined PAYE = £8,486. Correct tax on £55k: £42,430 above PA, of which £37,700 at 20% = £7,540 and £4,730 at 40% = £1,892, total £9,432. Under-collection: £946. HMRC will recover this via a coded-out adjustment to next year's tax code or as a one-off bill via the Personal Tax Account. NI is paid separately by each employer: £2,594 by main, £0 by second (£10k under the per-employment annual PT of £12,570).

Fixing a Wrong Code

The clearest signs of a wrong code on a second job are: an emergency 0T or 0T W1/M1 still showing after 2+ payslips; a BR code when your combined income is clearly into higher-rate territory (should be D0); a 1257L code on the second job (should normally be BR — you may be double-claiming PA, which HMRC will eventually reclaim through P800).

Three paths to fix it. (1) HMRC Personal Tax Account: log in at gov.uk with your Government Gateway credentials, navigate to PAYE income tax, update employments. New codes typically reach both employers within 1-2 weeks. (2) Phone HMRC on 0300 200 3300 (busy line — call early morning). (3) Write to HMRC, PAYE & Self Assessment, BX9 1AS, quoting both PAYE references, your NI number and the expected income from each employment.

If you want to split your Personal Allowance across the two jobs (because the main job uses only some of it), request a specific split in your update — e.g. PA £8,000 on job one (code 800L) and PA £4,570 on job two (code 457L). HMRC will issue new codes accordingly. The split should be set so each job's allowance roughly matches its expected pay. Re-balance any time your situation changes.

When Self Assessment Kicks In

A regular two-PAYE-jobs situation does not by itself require Self Assessment. HMRC already has all the data from both employers and reconciles automatically via the autumn P800 statement. You do nothing — refund arrives by cheque or by bank transfer (if you have logged into the Personal Tax Account and given bank details), or a bill arrives that is coded out of next year's tax code in most cases.

Self Assessment is required if any of the following apply alongside your second job: total income exceeds £150,000; you receive untaxed savings interest above £10,000 (or above £1,000/£500 PSA depending on band, if HMRC asks); you receive untaxed dividends above £10,000; you have rental income above £2,500 net of expenses; you have self-employed income above £1,000 (the trading allowance); you are a company director receiving non-PAYE remuneration; you owe Capital Gains Tax that wasn't already paid in real-time; or HMRC writes to you asking for a return.

If you do need to file, the deadline is 31 January following the end of the tax year (so for 2025/26 the deadline is 31 January 2027 for online filing). The process pulls in your employment income from HMRC's records automatically, so the additional reporting burden is small. Most multi-employment taxpayers spend 30-60 minutes on the SA return once a year.

The £1,000 Trading Allowance

If your second income is not employment (PAYE) but self-employed gig work — Uber driving, Etsy sales, casual freelancing, online tutoring — the £1,000 trading allowance applies. The first £1,000 of gross trading income is tax-free and exempt from reporting. You owe no income tax, no NI, and you do not need to register with HMRC for Self Assessment.

Above £1,000 you must either: (i) deduct actual expenses from your gross income and pay tax on the net profit at your marginal rate (20% basic, 40% higher); or (ii) deduct the £1,000 allowance from gross income and pay tax on the remainder. You cannot use both. The £1,000 deduction is a simplification — choose whichever gives you a smaller taxable figure.

Important: the £1,000 trading allowance is per person, not per source. If you sell on Etsy AND drive for Uber AND tutor on the side, the total of all three streams counts toward the £1,000. There is also a separate £1,000 property allowance for casual rental income (e.g. renting out parking spaces); that is its own £1,000 wholly separate from the trading allowance. PAYE second-job income does not eat into either allowance and vice versa.

Official References

FAQs

Do I pay more tax on a second job in the UK?

Not in the long run — HMRC charges the same total income tax whether you earn £35,000 from one job or £25,000 plus £10,000 from two jobs. The combined liability follows the same band structure (20% above the £12,570 Personal Allowance, 40% above £50,270). The difference is in how PAYE collects it month by month. Your second job is taxed under the BR code at a flat 20% on every pound, because the Personal Allowance is already attached to job one. This means a low-paid second job can over-collect tax (which HMRC refunds via P800 after year-end) and a high combined income can under-collect (which HMRC bills you for the same way).

What is the BR tax code?

BR stands for Basic Rate. It tells your employer to tax every pound of pay at 20% with no Personal Allowance. HMRC assigns BR to your second (or third) employment because the Personal Allowance is treated as a single £12,570 chunk and is normally allocated entirely to the main job — typically the one with the higher pay or longest history. A BR code is correct for most second jobs paying basic-rate workers. It is wrong if your combined income reaches higher-rate territory (then you need D0 = 40% flat) or if you genuinely earn very little in total (then you may want to split the PA between employments).

How does National Insurance work with two jobs?

NI is calculated separately by each employer, using its own thresholds. For 2025/26 the Primary Threshold is £242 per week (£1,048 per month). Each employer takes 8% Class 1 NI on earnings above that threshold from its own pay, with no cross-employer aggregation. So if you earn £200/week in one job and £200/week in another, both fall below the threshold and you pay zero NI — even though your combined £400/week would otherwise attract NI. This NI quirk often means a second job is effectively NI-free, even though the tax is taken at full 20% via BR. The upper earnings limit (£967/week) is also assessed per employment.

What is the 0T tax code and when do I get it?

0T means zero Personal Allowance — your pay is taxed at the marginal rate band (20% up to £50,270, then 40%, then 45%) on every pound, with no allowance and no cumulative calculation. HMRC issues 0T when it cannot work out a correct code: new starter without P45, missing data, pension lump-sum withdrawal, or after a long break in employment. 0T is more punitive than BR because it taxes higher-rate earners at 40% above £50,270 within the period, often producing very large over-deductions on a single payslip. Fix it by submitting your P45 to your employer or contacting HMRC to issue the correct code.

When does a second job require Self Assessment?

A regular PAYE-employed second job does NOT trigger Self Assessment by itself — HMRC has all the data already. SA is required if: (i) your second income is self-employed and exceeds the £1,000 trading allowance; (ii) you become a higher-rate (40%) taxpayer with untaxed savings, dividends or other income above the usual thresholds; (iii) total income exceeds £150,000; (iv) you have rental income above £2,500; or (v) HMRC writes to you asking for a return. For most PAYE+PAYE workers HMRC handles the year-end reconciliation automatically through a P800 statement issued in the autumn after the tax year end.

Can I split my Personal Allowance between two jobs?

Yes. If you have two part-time jobs and your main one earns under the £12,570 Personal Allowance, the default of giving full PA to that one wastes the unused portion (the second job still pays BR 20%). You can write to HMRC (or use the Personal Tax Account online) to request a split — for example, 700L on job one (PA of £7,000) and 557L on job two (PA of £5,570). HMRC will then issue updated codes to both employers. This avoids over-collection and ends the year with no refund-and-bill cycle. Worth doing if both jobs are stable and earnings split is broadly predictable.

Why might I underpay tax when I have two jobs?

Because BR assumes basic rate but your combined income may push you into higher rate (40%) territory. Example: job one pays £45,000 (code 1257L), job two pays £10,000 (code BR at 20%). Job one's PAYE deducts higher-rate tax only on the slice above £50,270 within that one employment — none, because £45k is under that. Job two's BR takes 20% on the £10k. But your combined income is £55,000, meaning £4,730 of that £10k should be at 40%, not 20%. PAYE has under-collected £946 (£4,730 × 20%). HMRC's year-end P800 calculation will bill you for this — usually collected via a coded-out adjustment to next year's 1257L.

Why might I overpay tax when I have two jobs?

Because BR ignores your unused Personal Allowance. If job one pays only £8,000 (well under the £12,570 PA), then £4,570 of PA is unused. Job two with BR pays 20% on every pound — including its first £4,570, which arguably should have been tax-free. By year-end HMRC's P800 reconciles the actual liability and refunds £914 (£4,570 × 20%) via cheque or the next pay packet. To avoid the refund cycle, request a PA split from HMRC at the start (see previous FAQ).

Does the £1,000 trading allowance apply to a second employment?

No — the £1,000 trading allowance is for genuinely self-employed gig income (Uber, Etsy, freelance work, casual selling) only. Income from a PAYE employer (with a payslip and tax code) is employment income, not trading income, and the allowance does not apply. So if your second job is regular PAYE, every penny is taxed via BR or whatever code applies. The allowance is useful for side hustles: if you earn £900 from eBay sales on top of your day job, you owe no tax and have no SA filing requirement; £1,100 in side-hustle income triggers SA on the £100 over.

How do I fix a wrong tax code?

Three routes. (1) Personal Tax Account on gov.uk — log in with your Government Gateway credentials, navigate to PAYE income tax, click “Update your details”. HMRC re-issues codes to both employers within 1-2 weeks. (2) Phone HMRC on 0300 200 3300 — quicker but expect a wait. (3) Write a P50/P800 letter to HMRC quoting your NI number, both PAYE references and your expected income split. After the tax year ends in April HMRC sends a P800 reconciliation automatically; any refund arrives by cheque or your bank account within 6 weeks. For larger one-off corrections (e.g. emergency 0T code refund), use form P50 (no longer working), P53Z or P55 for pension lump sums, or P800 for general reconciliation.

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About the author

Emma Clarke

UK Tax Writer

Emma Clarke has been writing about UK personal tax since 2018, with a particular focus on Self Assessment, PAYE coding and the practical mechanics of how HMRC actually applies the rules to ordinary salaries. Her work concentrates on translating the dense language of HMRC manuals and Finance Act schedules into worked examples that show, pound by pound, how income tax and National Insurance reduce a gross salary to the figure that lands in a UK bank account. Emma covers the full PAYE lifecycle: tax codes (1257L, BR, K codes, emergency codes), the Marriage Allowance, the High Income Child Benefit Charge, salary sacrifice arrangements and their effect on pensionable pay, the Apprenticeship Levy, and the differences between the rUK and Scottish income-tax regimes. She is particularly interested in the edge cases that catch PAYE employees out — the £100,000 personal-allowance taper, the 60% effective marginal rate it creates, and the interaction between student-loan plans and pension contributions. Every figure in Emma's articles is verified against the current HMRC rates pages and worked through a Self Assessment calculation by hand before publication. She writes to CalcHub's editorial standards: primary-source citations, plain English, no promotional language, and clear "this is general information, not financial advice" disclaimers where appropriate.

Personal-finance writer since 2018
UK tax specialism — PAYE, Self Assessment, National Insurance
Writes to CalcHub editorial standards (primary-source citation, annual review)

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Disclaimer: Tax bands, NI thresholds, allowances and code conventions change at Budget and at the start of each tax year. Figures here reflect 2025/26. Always check your own tax code, refer to gov.uk and seek personal advice from HMRC or a qualified adviser for material amounts.