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Claiming the tax free threshold on 2 jobs? One pay sometimes fluctuates.

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Hello Smiley Happy

I have 2 jobs, one I work 10 hours a week and I earn $264.10 per week gross (lets call this: Job A). And the other I work 10 hours a week and I earn $223.37 per week grossly (lets call this: Job B). Am I doing the right thing if I claim the tax-free threshold on the one that pays me the most which is Job A?

Sometimes I will pick up an extra shift or 2 at Job B which will mean that Job A will no longer be the one that pays me the most. That may just be for that week though, the next week I might not be able to pick up any extra shifts and I go back to my 10 hours  for that week where I earn $223.37 at Job B. What happens when one week I earn more for Job B and I have claimed the tax free threshold on Job A? How do I not get a tax debt at the EOFY? 

 

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Hi @Erika21,

 

Welcome to our Community!

 

Generally speaking, if you're receiving income from more than two payers, it's recommend to only claim the tax-free threshold from the payer who pays you the highest salary or wage for the financial year (not just on a weekly basis).

 

The payer who you don't claim the tax-free threshold from is required to withhold at the 'no tax-free threshold' rate, to reduce the likelihood of you having a tax debt at the end of the financial year.

 

If you're worried that too little is being withheld and you may receive a tax bill at the end of the financial year, you can apply to vary the amounts withheld to match your end of year tax liability. You can ask either of your payers to increase the amount they withhold from your payments. This is known as an upwards variation.

 

You can use our income tax estimator tool to help estimate your tax refund or debt for the 2018 financial year. You can also find information about how much tax you should pay on a second job in our knowledge base article on our Community!

 

 

Thanks, JodieH.

 

1 REPLY 1

Best answer

ATO Certified

Community Support

Replies 0

Hi @Erika21,

 

Welcome to our Community!

 

Generally speaking, if you're receiving income from more than two payers, it's recommend to only claim the tax-free threshold from the payer who pays you the highest salary or wage for the financial year (not just on a weekly basis).

 

The payer who you don't claim the tax-free threshold from is required to withhold at the 'no tax-free threshold' rate, to reduce the likelihood of you having a tax debt at the end of the financial year.

 

If you're worried that too little is being withheld and you may receive a tax bill at the end of the financial year, you can apply to vary the amounts withheld to match your end of year tax liability. You can ask either of your payers to increase the amount they withhold from your payments. This is known as an upwards variation.

 

You can use our income tax estimator tool to help estimate your tax refund or debt for the 2018 financial year. You can also find information about how much tax you should pay on a second job in our knowledge base article on our Community!

 

 

Thanks, JodieH.

 

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