Tax codes and more than one job or pension.

Having more than one job or pension can make tax feel hard to keep on top of. This page explains how tax codes work when you have more than one income.

Find out what to check and what to do if something doesn’t look right, so you can avoid surprise bills and be sure you’re paying the right amount.

How is tax taken if I have more than one job?

If you have more than one job, HMRC will treat one of your jobs as your main job. When you are paid for this job, your Personal Allowance will be applied.

The Personal Allows is how much you’re allowed to earn before you pay tax. Currently this is £12,570. So, on your ‘main’ job, you will only be taxed above this amount. 

In your other job, your pay will be taxed in full, usually at 20%.

Here’s an example.

Sam has two jobs.

In their main job, Sam earns £16,000 a year.
HMRC applies Sam’s Personal Allowance to this job. This means the first £12,570 is tax-free, and Sam only pays tax on the amount above that.

Sam also has a second job, earning £4,000 a year.
Because the Personal Allowance is already used up in the main job, all of this pay is taxed. Usually, tax is taken at 20%.

So even though Sam has two jobs, their tax-free allowance is only used once — on the main job.

It’s important to check that your PAYE tax code is correct for each job you have. Find out more about PAYE codes.  

How do I check I’m being taxed correctly?

Sometimes the system HMRC use can get this wrong, so it’s important to check that the right tax codes are being used. Here are some steps to help make sure you get taxed the right amount.

Tell HMRC about your jobs.

Make sure HMRC know about any second jobs or pensions that you have. If you don’t make sure their information is correct, it could take some time before HMRC spots any mistakes. This could mean they send you a bill that you’re not expecting.

Check your tax codes.

The tax code 1257L tells HMRC not to tax the first £12,570 of your pay (in 2025/26), because this is your tax-free allowance. If you have more than one job, this code should only be applied to one of your jobs. If they have applied this code to both your jobs, you will end up owing them tax. If this happens, contact HMRC straight away, so that you don’t build up a tax bill.

If you have two jobs and your total taxable income (after your Personal Allowance has been taken away) is more than £37,700 in 2025/26, then you will be a higher rate taxpayer. This means that if you have a basic rate tax code (a BR code) on your second job, you might not be taxed enough. If you’re concerned about that contact HMRC to get the correct codes. 

What if I earn less than the Personal Allowance on my main job?

If you have two jobs, but neither pays more than your Personal Allowance, using your tax-free allowance in just one job doesn’t work. This is because the rest of your allowance won’t get used.

You have two ways to fix this:

• Ask HMRC to split your personal allowance between your two jobs. This only works well if your pay from both jobs is steady and doesn’t change much. You’ll also need to check now and then that the split still makes sense.
• Wait until the end of the tax year and claim a refund. You can ask HMRC for your money back or wait for them to check your taxes and send you a refund automatically. If they ask you to send your P60 forms (one from each job), make sure to keep copies for yourself.

 

How do I pay tax on my State Pension if I also have a job?

If you get the State Pension and also work, your tax can feel confusing.

Your State Pension is taxable, but HMRC sets your personal allowance against that first. The Department for Work and Pensions (DWP) does not take tax off before paying it to you. Instead, HMRC collects any tax another way. They take it from your wages.

They do this by reducing your tax-free allowance in your job. This means a bit more tax is taken from your pay through PAYE, to cover the tax due on your State Pension.

Find out more about tax on State Pensions.

What if I also have a private pension?

If you have a job and a pension, your Personal Allowance amount will be applied to the earnings from your job.

Your pension will then be taxed in full at 20%.

If you have more than one pension these will be taxed at 20% as well.

Find out more about tax and pensions.