PAYE tax across multiple jobs

How PAYE works when you have more than one job

The key point is that Income Tax under PAYE looks at your total taxable income across all your jobs in a tax year, which runs from 6 April to 5 April. There is no special rule that exempts students from paying tax. Students pay tax on exactly the same basis as everyone else. What matters is how much you earn in total, not whether you are a student or how many separate employers you have.

You get one tax-free Personal Allowance for the whole year, currently £12,570. This is the amount of income you can earn across all sources before Income Tax is due. You do not get a separate allowance for each job.

How your tax code is split across jobs

Each employer operates PAYE separately using a tax code that HMRC issues for that job. When you have more than one job at the same time, HMRC normally allocates your whole Personal Allowance to one job, usually the one paying the most, and applies a different code to the other.

The job that carries your allowance will usually have the code 1257L. This means the first £12,570 across the year (roughly £1,048 per month or £242 per week for that job) is tax-free, and you pay 20 per cent on income above that.

Your second job will often have the code BR, meaning basic rate. Every pound earned in that job is taxed at 20 per cent, with no tax-free element, because your allowance is already being used elsewhere. If your income is high enough to reach higher-rate bands, HMRC may use D0 (40 per cent) or D1 (45 per cent) instead, but that is unlikely on typical student earnings.

If you start a job without a P45 and the employer does not have the information needed, you may be put on an emergency code such as 0T, W1 or M1 temporarily, which can cause too much tax to be taken until HMRC corrects it.

Why this matters for students and short-term work

The practical problem for students and people doing several short-term jobs is that the PAYE system often takes too much tax during the year, even where your total annual income is below the Personal Allowance and you should pay nothing at all.

This happens in two common ways. First, on a BR second job you are taxed at 20 per cent from the first pound, even if your overall earnings for the year are well under £12,570. Second, if you work intensively over the summer or in a short burst, PAYE may treat that pay as if you were earning at that rate every month, pushing you over the monthly tax-free threshold even though your yearly total is low. There is no longer a special student starter form to prevent tax being deducted, so overpayment is common.

Splitting your allowance more sensibly

If you have two ongoing jobs and neither individually uses up your full allowance, you do not have to leave all the allowance on one job. You can ask HMRC to split your Personal Allowance between the two employments so that less tax, or no tax, is deducted from each during the year. This is worth doing if, for example, you earn a few thousand pounds from each of two part-time jobs and your combined income is under £12,570.

You can do this by contacting HMRC, ideally through your Personal Tax Account online or the HMRC app, and telling them your expected earnings from each job. They can reissue tax codes that share the allowance in proportion to your earnings.

Getting overpaid tax back

If tax has been over-deducted, you are entitled to a refund. How you get it depends on timing.

1. During the tax year, if you are still working, HMRC can often correct your code so the refund comes through your pay automatically once the code is updated.

2. During the year, if you have stopped working and do not expect to work again before the next 6 April, you can claim a repayment using HMRC’s process for reclaiming tax when you have stopped work, which involves form P50 or the online equivalent.

3. After the tax year ends, HMRC reconciles your PAYE records and usually sends a P800 calculation if you have overpaid, telling you how to claim the repayment. You can also check and claim through your Personal Tax Account.

Keep your payslips, your P45 when you leave a job, and your P60 at the end of the tax year, as these show the pay and tax figures you will need.

National Insurance is different

Note that National Insurance works differently from Income Tax. It is worked out separately for each job on a per-pay-period basis and is not pooled across jobs in the same way, and it is not refunded simply because your annual earnings are low. So even where you pay no Income Tax, you may still see National Insurance deducted from a job where earnings in a given week or month exceed the NI threshold.

Practical next steps

1. Estimate your total expected earnings for the tax year across all jobs.

2. If the total is under £12,570, or if a BR code is taking tax you should not be paying, contact HMRC to ask them to split or reallocate your Personal Allowance across your jobs.

3. Give each new employer a P45 from your previous job, or complete the new starter declaration accurately, to reduce the risk of an emergency code.

4. Keep all payslips, P45s and P60s.

5. Check your Personal Tax Account after the tax year, or when you stop working, to reclaim any overpaid tax using P50 or a P800 refund.

Where the answer could change

If any of your work is self-employed or freelance rather than employment under PAYE, the position is different and you may need to report it through Self Assessment. If you live in Scotland the Income Tax rates and some tax codes differ, and if you are taxed as a Welsh taxpayer your code may begin with a C-prefix variant, though the Welsh rates currently match those for England. If your total income is genuinely high enough to reach higher-rate bands, the BR code on the second job will not collect enough tax and you could face an underpayment instead of a refund.