Tax on second job

[NeverHomeAlone]

I am applying for a second job as a vaccinator, working part time hours, mainly because I want to do what i can to help rather than anything else.
I am worried I will be heavily taxed as I already work part time and the vaccinator role will be my second job.

Can I put all of my vaccinator wage (it won't be very much as I will only be doing a shift or two max a week) in to pension and thus avoid being heavily taxed?

No

When I had 2 pt jobs I split my tax code.
When I had a full time job and a part time job I kept the tax allowance on the ft and was taxed 20% on the pt job. You won’t pay NI on the 2nd job unless the wage is high

You'll pay tax according to your total income (although it might take a bit of sorting your tax codes out).

Yes, you can reduce your tax bill by increasing pension contributions up to the annual limit (£40k?)

It seems mighty strange to be talking on the job to fulfil your social responsibilities at the same time as avoiding the tax to pay for them

Heavily taxed? You mean 20% on earnings above £12570? That’s really not heavy. It’s all part of paying your way in society.

@WitchDancer

No

I thought you could pay up to 100% of your earnings into a pension, or up to about £40k pa, whichever is lower?

But OP, like others have said, you won't be 'heavily taxed' unless your first job is so well paid that you go over the 40% tax threshold and you'll probably pay less NI in two PT jobs than one full time one.

You might pay more tax than needed in the short term, unless you ask them to split your tax code, but you'll get it back sooner or later, even if the overpayment is used to reduce the tax you pay next year.

I don't think you can contribute 100% of salary to pension because of minimum wage requirements.

I thought you were taxed differently if you had two jobs. A colleague mentioned in passing today that second jobs weren't worth it as you get heavily taxed, but they must have been mistaken and i was foolish for not googling it first before posting.

I have very little pension after taking time out for maternity leaves and to foster. I wasn't trying to engineer some big tax avoidance scheme, I just wanted to be wise with how I handle my money, boost my tiny pension and help out with the covid crisis. I'm genuinely sorry if i have offended anyone. Neither of my part time jobs are very well paid. I'm no where near the higher tax bracket and wouldn't be after taking on a second job either.

Ah sounds like you misunderstood your colleague, or they were wrong. Anyway we desperately need more vaccinators - it would be great if you can do it. And yes, you can always use your earnings to top up your pension if you don’t need the money before then.

You can put 100% of your salary into pension - it’s only relevant re minimum wage regulations if you are doing it via salary sacrifice

Ignore your colleague. You are raked in all income over 12600 (or whatever it is) your first job assuming it pays over that will use up the whole allowance so if you take a second job they tax you at 20% from the first pound

Your personal tax allowance is used against existing job first so if you use that all up your second job will be at 20%, or any balance transferred before tax is applied.

You might get put on an emergency tax code on your 2nd job and initially pay more tax. But it will all come out in the wash and if you'd overpaid you will get it back. That happened to my daughter when her previous part time job crossed over with her current one and they didn't issue her P45 on time.

It's not tax avoidance, it's an incentive from the Government in order for you to have a pension in your old age. Thank you for becoming a vaccinator

Your colleague was wrong! Agree you could have a blip before it gets sorted out, but you will not pay any additional tax over and above what you would if you earnt x amount through a single job.

The way the pension contributions would work (assuming you'd be paying into a personal pension, I can't think the employer would sort this out as it would presumably be a relatively short term appointment?) is that you pay net and the pension company reclaim the tax from HMRC.

So say you earn £100 and all of your tax code is applied to tour other job.
You are taxed £20 PAYE (and whatever NI, depends on how much you earn per pay period, might be below the limit).
You receive £80 and can then contribute upto £80 into your personal pension.
If you contribute the full £80 then the pension company claims back the £20 (or pro rata on whatever you contribute).

You can contribute the lesser of 100% of your earnings or £40,000 (unless you are already drawing a pension in which case its restricted), but need to take into account any contributions in your other job (including employer contributions).

It's one of those great myths that u hear. The other being children don't pay tax.

Doesn't matter how many jobs u have as long as it's under the high rate tax amount just over £50k then you will still pay 20% tax and then ni of 12%. What might happen though is you get put on an emergency tax code so do check your wage slip and make sure they update it to your proper tax code. You might need to get something from hmrc to send to them.

So an easy way to calculate what ur take home pay will be from ur second job is take off 32%. If your other job already earns above £12,571 then your already using your personal allowance and ni threshold on that job.

You could put it towards your pension if you wanted to. It's called an additional voluntary contribution (AVC). A lot of people who are higher rate tax payers do this with bonuses etc as they lose a lot of it in tax.

@champions55

It's one of those great myths that u hear. The other being children don't pay tax.

Doesn't matter how many jobs u have as long as it's under the high rate tax amount just over £50k then you will still pay 20% tax and then ni of 12%. What might happen though is you get put on an emergency tax code so do check your wage slip and make sure they update it to your proper tax code. You might need to get something from hmrc to send to them.

So an easy way to calculate what ur take home pay will be from ur second job is take off 32%. If your other job already earns above £12,571 then your already using your personal allowance and ni threshold on that job.

You could put it towards your pension if you wanted to. It's called an additional voluntary contribution (AVC). A lot of people who are higher rate tax payers do this with bonuses etc as they lose a lot of it in tax.

NI is separate to tax, you have a separate NI limit on each job/pay period. It is not cumulative.

(Unless you are a participator in a closed company - basically a shareholder in a company with a small number of shareholders. You probably don't have to worry about this.)

I also have a 2nd job within the NHS, OP. I have sorted my tax codes so that I pay 20% tax on everything I earn from the second job. Contrary to your colleague, I find it very much worth it. I have earned the best part of £8k extra between Jan - Dec of this year, by doing an extra shift or two a week x

Why do people think this about second jobs?

@NeverHomeAlone

"A colleague mentioned in passing today that second jobs weren't worth it as you get heavily taxed,"

They are talking rubbish. You won't pay national insurance until you earn £184 per week. You can out all your earnings in (subject to limits you are not likely to breach) and save the tax. Just let HMRC know and they will adjust your tax code if you are not contributing over £10k or claim back in self assessment. Pretty easy to do.

I also have a 2nd job in the NHS.

My tax allowance goes to my main job and the 2nd is taxed at 20%. It is very much worth it for me. I think you would have to be on the cusp of the 2nd tax bracket (50k) for a 2nd job not be financially beneficial.