Second Job & Side Hustle Tax UK 2026/27 — What You Actually Keep
Got a second job or a side hustle? You might have noticed your tax code looks different on your new payslip — or that more tax is being taken than you expected. Here’s exactly how HMRC taxes second jobs and side hustles in 2026/27, and a few common misconceptions that catch people out.
You only get one personal allowance
The most important thing to understand first. For 2026/27, the personal allowance is £12,570. It doesn’t matter how many jobs you have — you get one personal allowance across all of them.
Your main employer applies this allowance through your tax code — usually 1257L. That means the first £12,570 you earn is tax-free. Everything above is taxed at the standard rates.
What is a BR tax code?
When you start a second job, HMRC gives that employer a different tax code — usually BR. BR stands for Basic Rate. It means every pound you earn from the second job is taxed at 20% from the very first pound, with no personal allowance applied.
This isn’t a penalty. It’s because your personal allowance is already being used by your main job. If your second employer also applied a personal allowance, you’d effectively get two tax-free amounts and underpay tax all year.
Are you paying more tax overall? No.
Your total tax on your combined income is exactly the same as it would be if you earned the same total from a single employer. The BR code changes how the tax is collected — not how much you pay.
| Scenario | Total tax |
|---|---|
| One job at £36,000 | £4,686/yr |
| Main job £28,000 (1257L) + second job £8,000 (BR) | £4,686/yr |
Second job tax codes
| Code | When it applies | Rate |
|---|---|---|
| BR | Second job, combined income below £50,270 | 20% on all earnings |
| D0 | Combined income above £50,270 | 40% on all earnings |
| D1 | Combined income above £125,140 | 45% on all earnings |
If your combined income crosses £50,270 but HMRC hasn’t updated your second job code to D0, you could underpay tax during the year and face a bill at the end. Check your codes at gov.uk/check-income-tax.
National Insurance on two jobs
Unlike income tax, National Insurance is calculated per job, not on your combined income. Each employment has its own NI threshold of £12,570 a year (£242 a week).
- If your second job earns below £12,570/yr — no NI on that job
- If both jobs earn above £12,570/yr — you pay NI on both separately at 8% in the main band
- You cannot overpay NI simply by having two jobs
Self-employed side hustle — different rules
If your extra income is self-employed rather than from a second employer, the BR code doesn’t apply. Instead, you report self-employed income through Self Assessment.
- Trading allowance: the first £1,000 of self-employed profit each year is tax-free
- Above £1,000: register for Self Assessment by 5 October in the following tax year
- Tax: income tax at your marginal rate on profits above your remaining personal allowance
- NI: Class 4 NI at 6% on self-employed profits above £12,570
- Rule of thumb: set aside 25–30% of self-employed earnings for tax
What to do when you start a second job
When your new employer gives you a starter checklist, make sure you indicate that you already have another job. This ensures HMRC applies the correct BR code from day one rather than applying a temporary emergency code that has to be corrected later.
If your main job income is below the personal allowance, you can ask HMRC to split the allowance between your two jobs — which reduces the tax taken in-year rather than waiting for a year-end refund.
Universal Credit and second jobs
If you receive Universal Credit, every pound you earn from a second job reduces your UC payment by 55 pence (above the work allowance). Worth factoring into your decision before taking on extra work.
Use the free salary calculator
To see the take-home on your combined income, enter the total of both salaries into the salary calculator and set your tax code to 1257L.
Also see our full guide to tax codes explained.
Frequently asked questions
Why is my second job taxed at 20% from the first pound?
Because your personal allowance (£12,570) is already being used by your main job. The BR code ensures your second employer deducts tax correctly without applying an allowance you’ve already used.
Am I paying more tax because I have two jobs?
No. Your total tax on your combined income is exactly the same as it would be from one job at the same total salary. The BR code changes how the tax is collected — not how much you pay.
What if I’ve been given the wrong tax code on my second job?
Contact HMRC on 0300 200 3300 or update your details via your Personal Tax Account at gov.uk. If you’ve overpaid tax, HMRC will issue a refund after the tax year ends.
Do I pay National Insurance on both jobs?
NI is calculated per job separately. If your second job earns below £12,570 a year (£242 a week), no NI is due on it. If it earns above that, NI at 8% applies on the earnings above the threshold.
Do I need to tell HMRC about my side hustle?
If your self-employed profit is under £1,000 a year, the trading allowance covers it and you don’t need to report it. Above £1,000, register for Self Assessment by 5 October following the end of the tax year in which you started earning.
Does a second job affect my Universal Credit?
Yes. For every pound you earn above your work allowance, your UC payment reduces by 55 pence. Check your specific work allowance with the DWP before taking on extra work.
This post is for general information only and does not constitute financial or tax advice. Contact HMRC or a qualified tax adviser for guidance on your specific situation.