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Re: Tax considerations when taking LWOP from employer and going on secondment to a second employer

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I am currently employed with an annual salay of ~$93k. I claim the tax-free treshold from this employer. I am about to take 6 months of leave without pay from this employer and work for another organisation who will pay a salary of ~$111k. Will this impact upon my tax in any way that I should consider? Should I not claim the tax-free threshold from this second employer? Thanks for any advice!

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Hi @amyparker

 

So long as your are not earning income from two employers at the same time, or even if there is a small overlap, then you should not encounter any problems claiming the tax free threshold for both. It would be about the same as if you were earning income from just one employer for the full financial year, especially as your income from each employer is within the same tax bracket.

 

If you did not claim the tax free threshold from the second employer you would loose a good portion of your weekly / fortnightly pay to withholding tax, and only to get the excess paid back at the end of financial year when you do your income tax return.  If you have a look at one of the ATO withholding tables you will see what I mean.   I know that I would rather have the use of the funds than let the ATO hold onto them until I lodge my return.

 

ATO 13 28 61

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Highlighted

Best answer

ATO Certified

MVF
Devotee

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Hi @amyparker

 

So long as your are not earning income from two employers at the same time, or even if there is a small overlap, then you should not encounter any problems claiming the tax free threshold for both. It would be about the same as if you were earning income from just one employer for the full financial year, especially as your income from each employer is within the same tax bracket.

 

If you did not claim the tax free threshold from the second employer you would loose a good portion of your weekly / fortnightly pay to withholding tax, and only to get the excess paid back at the end of financial year when you do your income tax return.  If you have a look at one of the ATO withholding tables you will see what I mean.   I know that I would rather have the use of the funds than let the ATO hold onto them until I lodge my return.

 

ATO 13 28 61

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