Students: I have two part-time jobs, am I entitled to personal allowances on both?

For Income Tax it doesn't matter how many jobs you have, you are only entitled to one Personal Allowance in any tax year (£9,440 in 2013-2014). For National Insurance you can earn up to this amount in each job without having to pay contributions.

If you start a second job - without giving up your first job - you won't have a form P45 (Opens new window). Instead, your new employer will give you a Starter Checklist, or ask you for relevant information before you first pay day to tell HM Revenue & Customs (HMRC) about you. This will help your employer allocate a tax code and work out the tax on your first pay day. It's important that you complete the Starter Checklist or provide the relevant information your employer has asked you for as soon as possible before your first pay day. If you don't you could end up paying the wrong amount of tax. You can also complete and print a copy of the Starter Checklist by following the link below. Give it to your employer, do not send the checklist to HMRC.

Starter checklist (PDF 748K)

Your new employer will then deduct tax at basic rate (20 per cent) from your wages.

However, if you don't pay tax on your first job it probably means that:

  • you are not using all of your Personal Allowance
  • you are paying too much tax

You can ask HMRC to split your Personal Allowance between your jobs.

Alternatively if your income from your second job is less than your Personal Allowance (£9,440 in 2013-2014) you can again choose to have your allowance split between your jobs. You should contact HMRC to arrange this.

For example, Mr James is entitled to a Personal Allowance of £9,440 for the tax year 2013-2014. He earns:

  • £20,000 from Company A
  • £1,615 from Company B

Mr James can ask his tax office to split his Personal Allowance as follows:

Allowances set against
Company Pay Allowances

Company A

£20,000

£7,825

Company B

£ 1,615

£1,615

Total

£21,615

£9,440 (Personal Allowance entitlement)

So, he receives his income from Company B without tax being deducted. This does not alter Mr James's overall tax bill, but the allowances are distributed differently.