Do you have a second job, a weekend gig, or perhaps some freelance work on the side?
You’re certainly not alone. These days, it’s quite common to have more than one income source. But here’s something that often gets missed — having multiple jobs can affect how much tax you pay, and not in the way you might expect.
If you don’t get it right from the beginning, you could end up with a tax bill at the end of the financial year. And that’s never a pleasant surprise.
Understanding the Tax-Free Threshold
Let’s start with the basics. In Australia, you can earn up to $18,200 each financial year without paying any tax. This is known as the tax-free threshold.
But here’s where things can get a bit complicated. You can only claim the tax-free threshold from one job at a time.
Claiming it from more than one employer might seem harmless, especially if both jobs are part-time or casual. But when the ATO adds up your total income, you may find that you haven’t had enough tax withheld. The result? A tax bill you didn’t plan for.
A Common Scenario: Does This Sound Like You?
Picture this: you work at a retail store during the week and do shifts at a local restaurant on weekends. You claimed the tax-free threshold for both jobs. It seemed like the easier option.
Fast forward to tax time, and suddenly you owe a few hundred dollars to the ATO because not enough tax was withheld. That’s money you probably had other plans for and it could’ve been avoided.
What Should You Do?
The general rule is simple: only claim the tax-free threshold from your main source of income, typically the job that pays you the most.
For your other jobs or income sources, let those employers know not to apply the threshold. This means they’ll withhold more tax from your pay throughout the year, which might feel like a hit to your weekly income, but it helps you stay on top of your tax.
Come tax time, you’re less likely to be caught off guard.
What If You’re Earning Less Than $18,200 Altogether?
If your combined income across all jobs is under the tax-free threshold, you generally won’t have to pay any tax.
However, the ATO doesn’t automatically know your total income or how it’s split between jobs. Each employer handles your tax separately based on what you’ve told them. If both are treating you as if you’re under the threshold, there’s a risk that too little tax is being withheld overall.
That’s why it’s important to get your tax settings right, even if you’re not earning much.
When Your Work Situation Changes
Picked up a second job recently? Started earning more from a side hustle? These changes can shift which job is considered your “main” one.
If that happens, review your current tax arrangements. You can update your employment details with each employer at any time — just let them know which one should be applying the tax-free threshold.
Staying on top of this means you’re more likely to avoid surprises at tax time.
Staying Ahead of the ATO
Paying tax from multiple jobs doesn’t need to be stressful, but it does require a bit of attention. Here are a few things to check right now:
- Have you claimed the tax-free threshold with more than one employer?
- Do you know which job is considered your main one?
- Have you reviewed your payslips or checked your income details in myGov recently?
If you’re unsure or think something might be off, don’t leave it until the last minute. The ATO has tools online to guide you, or you can reach out to a registered tax agent for help.
Final Thought
Getting your tax right when you have more than one source of income isn’t just about ticking boxes. It’s about avoiding stress, staying in control of your finances, and being prepared for what tax time brings.
You work hard, so make sure your tax setup is working just as hard for you.
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