The P2PPhFe(N2)(H)2 catalyst showed a significant ammonia yield under light irradiation. However, under thermal conditions, the hydrogen evolution reaction (HER) is favored over the nitrogen reduction reaction (N2RR), making P2PPhFe(N2)(H)2 an ideal system for studying the competition between both reactions. In this study, we used a series of computational tools to elucidate the photochemical reaction mechanism for the N2RR and thermal pathways leading to the HER with this catalyst. We calculated the energy profile for each transformation and estimated the rate constants for each step. Our results, which are consistent with experimental observations, indicate that photoinduced H2 elimination from P2PPhFe(N2)(H)2 promotes the formation of P2PPhFe(N2)2, which is on-path for N2RR. However, this elimination process is kinetically hindered due to high-energy barriers. Furthermore, our calculations reveal enhanced dinitrogen activation upon the conversion of P2PPhFe(N2)(H)2 to P2PPhFe(N2)2.