If you have more than one job, understanding how much tax to pay – and whether to claim the tax-free threshold – is important to avoid an unexpected tax bill. In Australia, the tax-free threshold is usually claimed from only one employer, but what you earn from a second job is still taxable and may be withheld at a higher rate.
This article explains how tax works when you have a second job, when you should or shouldn't claim the tax-free threshold, and how PAYG withholding is calculated. It also outlines what to consider if your income changes during the year.
Why does it feel like I pay more tax on my second job than my first job?
You don’t pay extra tax for having a second job. You pay the same amount of tax whether you earn $1000 a week through having a single job or multiple jobs. However, it can look like you're being taxed more because of the way the tax-free threshold works.
When you do your tax return, we add all your income together and calculate the tax you need to pay based on your total income.
To help make sure your employers withhold enough tax from your take home pay, you should claim the tax-free threshold from only your main employer, and not claim it from any other employers.
Say you’re already claiming this tax-free threshold from your first employer and you get a second job. Your first employer won’t withhold tax from the first $18,200 you earn each year. However, your second employer will withhold tax from the first dollar you earn. This is why it can feel like you’re paying more tax on your second job.
I don't think I will earn over $18,200. Can I claim the tax-free threshold for both jobs?
If your total annual income will be less than $18,200, you can claim the tax-free threshold from both jobs. Keep in mind that if you earn more than $18,200, you’ll likely receive a tax bill at the end of the year.
My extra income comes from my side hustle, how does tax work?
Can I change which job I'm claiming the tax-free threshold for?
Yes, you can! When you switch jobs or get a second job and want to change you can use our online services to change which job you claim the tax-free threshold for at any time. To do this:
Go to Question 5 ‘Do you want to claim the tax-free threshold from this payer?’
Select whether you want to claim the tax-free threshold or not
If you stop working for an employer, you don’t need to do anything. You will automatically stop claiming the tax-free threshold from them when they stop paying you.
How can I figure out my residency for the tax-free threshold?
Only Australian residents for tax purposes can claim the tax-free threshold. If you start or stop being an Australian resident for tax purposes during the income year, you’ll receive a part-year tax-free threshold.
Non-residents for tax purposes can’t claim the tax-free threshold and must pay tax on every dollar they earn.
We have information and decision tools to help you work out if you’re a resident for tax purposes. Use them to help you understand if you can claim the tax-free threshold:
I am 15 turning 16 soon. I will have two traineeships when i am 16, equaling about 66 hours per week. Traineeship A will make about 700 weekly and the other about 2000 fortnightly. I dont understand which one i declare as the tax-free one and how the whole thing works. I haven't payed tax at Traineeship A while being a casual worker as i haven't worked enough. So i dont even know what any of the process is, pls help me!! i have seen tax table stuff but have no idea how it works, thanks for ur help in advance
