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Working two jobs can be a great way to increase your income, gain experience or manage changing work commitments. But having more than one employer can also make Australian tax seem confusing.
A common question is: “If I have two jobs, will I pay more tax?”
The short answer is that your total income from both jobs is considered when calculating your income tax. The amount withheld from each pay packet during the year can look different depending on which employer claims your tax-free threshold and how your employers calculate PAYG withholding.
Understanding how this works can help you avoid an unexpected tax bill when you lodge your income tax return.
Australia uses a progressive income tax system. This means your taxable income is divided into different tax brackets, with higher rates applying to portions of income above certain thresholds.
If you have two employers, your income from both jobs is combined when your final tax liability is calculated.
For example, imagine you earn:
Your total employment income is $80,000 before considering eligible deductions and other income.
The ATO does not calculate your final tax liability as though the second job were a completely separate taxpayer. When you lodge your tax return, your income from both jobs is brought together and your final tax position is calculated based on your overall taxable income.
This is why the tax withheld from your second job may sometimes appear unusually high or low compared with what you expected.
The tax-free threshold allows eligible Australian residents to earn a certain amount of income each income year before paying income tax on that initial portion.
When you have more than one employer, you generally need to be careful about claiming the tax-free threshold.
When starting a job, you complete a Tax file number declaration or use the relevant employment onboarding process. One of the questions concerns whether you want to claim the tax-free threshold from that employer.
Generally, you should claim the tax-free threshold from only one employer at a time, usually the employer paying you the most.
If you claim it from multiple employers, too little tax may be withheld throughout the year. This can increase the possibility of having tax to pay when you lodge your return.
Usually, you should not claim the tax-free threshold from both employers.
There are circumstances where the ATO allows different treatment depending on your expected income and circumstances, but claiming the threshold with multiple employers without considering your total income can result in insufficient PAYG withholding.
For someone with two jobs, it is important to look at the combined income rather than considering each job separately.
If your circumstances change during the year, you should also review your withholding arrangements rather than assuming the original choice will continue to be appropriate.
This is one of the most common concerns for people working multiple jobs.
Suppose your primary employer pays you $1,000 per week and your second employer pays you $400 per week. The amount withheld from the second job may feel disproportionately high.
That does not necessarily mean you are being taxed at a special “second job tax rate”.
Instead, PAYG tax is withheld during the year based on information provided by each employer. Your tax-free threshold and withholding arrangements affect the amount withheld from individual payments.
Your final tax liability is determined when you lodge your Australian tax return.
If too much tax has been withheld overall, you may receive a refund. If too little has been withheld, you may have an amount to pay.
There is no separate Australian tax rate specifically for a “second job”.
Your second job simply increases your total taxable income.
For example, if your combined income moves you into a higher marginal tax bracket, the additional income may be taxed at a higher marginal rate. However, this does not mean your entire income suddenly gets taxed at that higher rate.
Only the portion that falls within the higher bracket is taxed at the corresponding rate.
This distinction is important because many people assume that taking a second job automatically causes their whole income to be taxed more heavily.
The same basic tax principles apply if you have two casual jobs.
Your employers generally withhold PAYG tax from payments based on the information you provide and the applicable withholding rules.
Casual employment can sometimes make your income less predictable because your hours may change from week to week. If your income changes significantly, it can be worth checking whether your withholding remains appropriate.
Keep records of income from both employers and check your income statements through myGov before lodging your tax return.
A second job does not have to be a traditional part-time position. You might work evenings, weekends or occasional shifts while keeping your main employment.
From an income tax perspective, employment income from these jobs generally forms part of your assessable income.
You should keep track of income from all employers throughout the income year. Your employers generally report your payment information electronically, but checking your records can help identify discrepancies before you lodge.
At tax time, your employment income from both jobs is included in your Individual Tax Return. Your income statements from your employers are generally available through myGov and the ATO’s online services once reported by your employers.
When preparing your return, you should check:
The final result can be a refund, no additional tax payable, or an amount owed to the ATO.
Yes, you may be able to claim eligible work-related expenses, but the normal ATO rules still apply.
Having two jobs does not automatically make an expense deductible.
For an expense to qualify as a work-related deduction, it generally needs to meet the relevant requirements, including that you incurred the expense yourself, it was directly related to earning your income and you were not reimbursed.
You also need appropriate records.
For example, if you purchase equipment that is genuinely used for work, its deductibility will depend on the circumstances and how it is used.
This area requires particular care.
Travel from home to your normal workplace is generally private and not deductible simply because you have more than one job.
However, travel directly between two workplaces on the same day can potentially be deductible where the relevant requirements are satisfied.
For example, if you finish your first job and travel directly to your second workplace, the circumstances may be different from travelling from home to work.
Do not assume that all travel connected with having two jobs is deductible. The purpose and circumstances of the trip matter.
Working from home may create additional tax considerations.
If you genuinely incur additional running expenses while working from home and meet the ATO’s requirements, you may be able to claim certain expenses using an appropriate method.
However, you should keep the necessary records and ensure the expense relates to your income-producing activities.
If you work from home for one employer and at a workplace for another, keep the activities and expenses clearly documented rather than automatically claiming a percentage of household costs.
Your overall income and circumstances can affect how the Medicare levy applies to you.
The Medicare levy is generally calculated as a percentage of taxable income, subject to relevant rules, thresholds and exemptions.
There can also be additional considerations for people who do not have an appropriate level of private patient hospital cover and whose income is above the relevant thresholds.
Because these rules depend on your circumstances, having two jobs is another reason to look at your total income rather than treating each employment relationship independently.
If you have a HELP debt or another study or training loan covered by the Australian student loan repayment system, having two jobs can require extra attention.
Your repayment obligation is generally based on your overall repayment income, not simply the income from one employer.
Payroll withholding and your final repayment obligation can therefore produce different results.
If your combined income increases during the year, check that your tax and study loan withholding arrangements continue to reflect your circumstances.
Starting a second job partway through the income year does not create a separate tax year for that employment.
For example, if you start a second job in February, the income you earn from that job during the remainder of the income year is included with your other income when your tax return is prepared.
This can make your final tax position different from what you expected based only on your regular weekly pay.
It is worth reviewing your PAYG withholding when your employment situation changes significantly.
Yes. Working two jobs does not prevent you from receiving a tax refund.
A refund depends on your overall tax position.
For example, if the combined PAYG tax withheld from your employment income is more than your final tax liability after taking relevant deductions and other factors into account, you may receive a refund.
On the other hand, if insufficient tax was withheld during the year, you may have tax to pay.
A refund should therefore not be assumed simply because you have multiple employers.
Good record keeping becomes particularly useful when you have multiple sources of employment income.
Keep records relating to:
The ATO has specific record-keeping requirements, so retain documents for the required period even after your return has been lodged.
Having multiple employers does not automatically make your tax return complicated, but certain mistakes are common.
This can result in insufficient tax being withheld during the year.
There is no separate “second job tax rate”. Your final tax liability is based on your overall taxable income and applicable tax rules.
Make sure income from every employer is included in your tax return.
An expense is not deductible merely because it was incurred while working. The ATO’s deduction requirements still apply.
If your second job becomes more regular or your hours increase substantially, your withholding position may need to be reviewed.
For many employees, preparing a tax return with two sources of employment income is straightforward. However, your situation may need more attention if you also have investment income, a HELP debt, significant work-related expenses, salary packaging, foreign income or other tax considerations.
If you are unsure whether the tax withheld from your two jobs is sufficient, or you are uncertain about deductions and your final tax position, it can be useful to speak with a tax professional. You can Contact Tax Return in Perth to discuss your circumstances and get guidance relevant to your Australian tax return.
Also read: Multiple Sources of Income? Here’s How to Report Them on Your Australian Tax Return
Working two jobs in Australia does not mean your second job is automatically taxed at a special rate. The key point is that your income from both jobs is considered when your overall tax liability is worked out.
The tax-free threshold, PAYG withholding, deductions, Medicare levy and any study loan obligations can all affect your final result.
If you have recently started a second job, check that your employment details and withholding arrangements are correct, keep records of eligible expenses and review your income information before lodging your return.
Getting these details right during the year can make tax time much easier and reduce the risk of an unexpected tax bill.
If you have income from multiple employers and are unsure whether your PAYG withholding, deductions or tax return are correct, Contact Tax Return in Perth and speak with our Perth tax team about your situation.