Many people are starting to take on second jobs, with more and more seeking an extra source of income as the cost-of-living crisis continues.
Check your Contract
You should make sure to check your existing contract allows you to take on an additional job before taking the plunge.
You should also thoroughly read through the contract of the second job, to make sure you are completely aware of your job responsibilities and what will be expected from you.
Don’t Just Consider the Financial Impact
The first thing you should ask yourself when considering taking on a second job, is “is it realistic?” You might be able to handle each job role in isolation, but can you handle the combination of the two workloads? Do you have time to do two jobs at once?
Don’t stretch yourself too thin. With a second job, you need to consider more than its financial impact; you also need to think about how it might affect your mental and physical health.
Perhaps you think it will have a negative effect, with added stress and time constraints. Or maybe, you think it will have a positive impact. For example, you may be feeling a lack of job security and a second job could help relieve stress by providing a safety net if you lose your first job.
If you are considering a change in career, a second job could be the first step in doing so. You could learn new skills and gain experience for a career change without giving up the security of the income you were already earning.
A big thing to think about with any job is your work-life balance. You should ask yourself whether the extra money you’ll be earning is worth the time you will be sacrificing…
Time for Tax!
You must tell HMRC about changes to your taxable income; you can inform them about a second job by using a starter checklist from your new employer. Alternatively, if self-employed, you should fill out a self-assessment tax return.
You only get one personal allowance, so if you use all of this allowance on your first job, you will pay income tax on all of the earnings of your second job.
However, national insurance is applied to each individual job rather than your total income. Therefore, if you earn less than £242 a week for each individual job, but over £242 as a combined income, you will still pay no national insurance. Click here to see the different National Insurance rates.
Pensions
Getting a second job may give you the opportunity to pay into another workplace pension scheme and benefit from employer contributions.
It’s always a good idea to build your pension as much as you can afford to, as it works on a system of compound interest… so, the earlier you save, and the more you save, the more your retirement fund will grow.
If you want to read more about how to financially prepare for retirement, click here.