(Extra) evening jobs and taxation

[evilC]

I'm thinking of going for an evening job to supplement my normal income. It'd be about 10 hours a week and (unfortunately) it's not something cash-in-hand like cleaning or pub work - it has to be declared and all official, like.

The thing is, I want to know if the extra net earnings after taxation would make it worth it? I certainly wouldn't want to end up actually losing money, even. Thus, is there any (easily digestible) site that tells you how much you're likely to end up with in total (i.e. from both jobs) after tax, where 'tax-bracket' boundaries lay, etc?

I can't be the only person who has wondered about this on here?

[Banana Banana]

(Extra) evening jobs and taxation

HMRC and many accounting firms have tax guides.

To sum up your effective rate of taxation (including NI) is as follows

If you earn less than £4,940 per year (£95 per week)0%

If you earn up to £6,475 per year (£124 per week) 0% Tax, 11% National Insurance

If you earn up to £43,875 per year (£843.75 per week) 20% Tax and 11% National Insurance

If you earn more than that you pay 40% Tax and 1% National insurance.

So the marginal rate you will pay on your extra earnings will depend on where you currently pay tax.

However if your additional employment is self-employed and you are unlikely to make profits in excess of £5,175 in the year you will not need to make national insurance contributions on them.

[pebblethefish]

(Extra) evening jobs and taxation

As far as I can find out this is how it works. Basically you just pay the normal tax rate, only without the first however much it is you get tax free, so it's 20% on everything.

Get them to pay you in cash, like I do with my other jobs. So much easier.

[evilC]

(Extra) evening jobs and taxation

Thanks, chaps - much appreciated.

Financial stuff is a huge blind spot for me. As soon as anyone mentions tax, pensions, etc. 'in the real world' my brain just instantly switches off. Thus, it's very handy to have such references.

[sw2borshch]

(Extra) evening jobs and taxation

Not sure if you’d class it as easily digestible, but try here. HMRC. And here. Employer's helpsheet E12

Assuming you’re already earning over £6475 you’ll pay tax on all you earn from this extra job at the Basic Rate of 20% unless your income goes above £34800, anything above that you’ll pay at Higher Rate, 40%.
Then there’s your Class I National Insurance Contributions (Employee or Primary, they’re known as), which isn’t a tax, but may as well be, at 11% - unless various conditions apply to you, such as are you of retirement age & other arcane delights.
So, you’ll probably pay 31% of this extra wage in income tax & NICs.

[Banana Banana]

(Extra) evening jobs and taxation

evilC wrote:

Thanks, chaps - much appreciated.

Financial stuff is a huge blind spot for me. As soon as anyone mentions tax, pensions, etc. 'in the real world' my brain just instantly switches off. Thus, it's very handy to have such references.

In all likelihood for every £100 you get paid will walk away with £69.

[sw2borshch]

(Extra) evening jobs and taxation

And of course the 10% tithe to the church. That’s off the top, people.

[pebblethefish]

(Extra) evening jobs and taxation

Oh, and if anyone needs help with pensions, I'm the man. Worked with them for far too many years before my self-loathing forced me into a proper job.

[ursus arctos]

(Extra) evening jobs and taxation

This on-line calculator appears to incorporate the basic principles that 101boro summarised.

The page also lists the basic allowances and income tax bands.

[Tubby Isaacs]

(Extra) evening jobs and taxation

Funny because I'm normally pretty comfortable with tax and spend, but doesn't 31% tax seem rather a lot to anyone? Maybe there could be some allowance to reflect this is a second job, and Clive would be making special effort to visit another workplace. It isn't really like doing overtime at your usual job. As it stands, lots of people in his position will just look at that and think it isn't worth doing. So the state gets zero tax and the job doesn't get done.

[Ek weet nie]

(Extra) evening jobs and taxation

31% tax actually seemed a little low to me. It would be 41% if he is in the higher income bracket.

Taxing total income seems like the easiest and fairest way to do things. I think it is just like doing overtime and am unsure why you think it isn't. Perhaps a mileage rate could be claimed for travel between two premises but it strikes me as a bureaucratic nightmare and one that could be easily abused.

I'm obviously talking generally here, I hope everything works out well for evilC.

[Tubby Isaacs]

(Extra) evening jobs and taxation

I don't think many people in the higher tax bracket would be looking to do bar work. The basic rate ought to be less than 31%, I think.

Re being different to overtime, you're right that it's no different to going in on an extra day for overtime to you your usual employer. I wasn't thinking of overtime like that, but you're right that it often is. I agree with you that any adjustment is likely to be bureaucratic.

[Ek weet nie]

(Extra) evening jobs and taxation

Well, 31% is for earnings from £6,475 to £43,875. That is a rather large range. I'm not sure about the exact figures but would agree that someone the lower end of that range, and perhaps even mid-range and above, shouldn't be paying 31% tax for supplementary work.

From my remembering of some posts of the Finnish-based Sheff Wed supporter whose name escapes me right now, the Finnish system is much less of a blunt instrument with percentage of tax changes every couple of thousand euro. That seems on the face of it a much fairer system.

edit - Ball Comrade is the poster, memory - it's a funny thing.

[Rogin the Armchair fan]

(Extra) evening jobs and taxation

(unfortunately) it's not something cash-in-hand like cleaning or pub work - it has to be declared and all official, like.

Er, all income has to be declared and all official, like, if it's from any form of employment. The penalties for tax evasion are incredibly severe in the UK, it really isn't a "game". People have been sent to prison before for not deducting NI contributions from the tip jar their waitresses shared out. There is a grey area between "working in a pub" and "helping a mate out for an evening", but it's not so grey an area that the Revenue haven't worked out exactly what's black and what's white.

[Ginger Yellow]

(Extra) evening jobs and taxation

As it stands, lots of people in his position will just look at that and think it isn't worth doing. So the state gets zero tax and the job doesn't get done.

Or someone without a job might take it. I'm not really sure what you're arguing - you seem to be taking the position that people who already have a job should have preferential tax treatment over people who are trying to get a job at all.

[Banana Banana]

(Extra) evening jobs and taxation

The £6,475 lower limit means that casual work is more valuable to people such as students who don't have other taxable income.

There was of course a 10% band introduced and later abolished by this government, that made the effective tax rate on lower paid people 21%.

Travel between employment sites for the same employer can be set against tax, if your employer doesn't do the decent thing and pay it.

[Tubby Isaacs]

(Extra) evening jobs and taxation

GY, there seemed to be a lot of these jobs vacant all the time (until this recession obviously). For rational reasons, the (benefit claiming) unemployed didn't take them. I certainly wouldn't. So I wondered what could be done to make someone like Clive take them.

I admit I haven't thought this through.

[Banana Banana]

(Extra) evening jobs and taxation

The obvious answer is to increase the wages to fill the jobs.

[MsD]

(Extra) evening jobs and taxation

pebblethefish wrote:

Oh, and if anyone needs help with pensions, I'm the man. Worked with them for far too many years before my self-loathing forced me into a proper job.

oooh, ello.

Any ideas how I could cash in my pension/take early retirement now that I can transfer it into another scheme?

[pebblethefish]

(Extra) evening jobs and taxation

PM for you on that one MsD - surely too boring for anyone else.