Second Job Tax in Australia: What You Actually Pay

Is a second job taxed more in Australia?🔗

No, full stop. Australia uses a marginal tax system: every dollar you earn is taxed at the same rate regardless of which job it came from, once your total income is added up at the end of the year.

What changes with a second job is not the rate of tax, but the withholding. Your employer withholds tax as a prepayment to the ATO throughout the year, and that prepayment is calculated differently for a second job. The withholding is not your final tax bill, it is an estimate. The real reckoning happens when you lodge your return.

The tax-free threshold, and why you claim it on one job🔗

Every Australian resident gets a tax-free threshold of 18,200 dollars per income year, so the first 18,200 dollars of income is tax-free. The catch: you can only claim that threshold from one employer at a time.

On your Tax File Number declaration, you say yes to the threshold on your main or highest-paying job, and no on any additional job. The threshold applies to your total income, not to each job separately, so if both employers applied it you would end up short at tax time.

Why your second job's payslip looks like it takes more tax🔗

Your second employer does not know how much you earn at your first job. All they know is what your TFN declaration told them: that you are not claiming the tax-free threshold. So they use the ATO's no-threshold withholding tables, and tax comes out from your very first dollar.

Will you get a refund or a bill?🔗

This is what everyone actually wants to know. It depends on your total income and how much was withheld across both jobs. Here is a realistic example using 2024-25 rates.

This is not a punishment, it is bracket creep in action, and it is entirely manageable if you plan for it. Figures are approximate and use 2024-25 ATO rates, so confirm the current ones and your own situation with the ATO or a registered tax agent. You can model your take-home pay across both jobs with our salary and tax calculator.

Bracket creep, HECS and the Medicare levy🔗

A second income can trigger a few other things. It can push part of your earnings into a higher bracket (the 30 percent bracket starts at 45,001 dollars for 2024-25). If you have a HELP or HECS debt, your combined income counts toward the compulsory repayment threshold (54,435 dollars for 2024-25), and your second employer may not withhold for it. And if your combined income tops 97,000 dollars (singles) without private hospital cover, the Medicare levy surcharge can kick in. Check the ATO's current thresholds, since these change each year.

How to avoid a tax-time surprise🔗

• Do not claim the tax-free threshold on both jobs. Claim it on your main job only.
• Ask your second employer to withhold extra. An extra 20 to 50 dollars a week can prevent a bill.
• Set money aside. A buffer of 30 to 35 percent of your second-job pay covers most people in the middle brackets. Park it in a separate account.
• Watch the HECS and Medicare thresholds if your combined income is creeping toward them.
• Lodge on time (31 October for most people without a tax agent) to avoid interest if you owe.

❓ Frequently asked questions🔗