Second Job Tax Calculator Australia 2025-26

Why Is My Second Job Taxed More?

Your second job is not actually taxed at a higher rate. The ATO taxes your combined income using the same progressive brackets. The difference is in how tax is withheld throughout the year.

On your primary job, you claim the tax-free threshold of $18,200. Your employer factors this into PAYG withholding, so the first $18,200 has no tax withheld. On your second job, you do not claim the threshold. Your second employer withholds tax from the first dollar at approximately 30%, which makes your second pay packet look much smaller.

At tax time, the ATO calculates your actual liability on your total combined income. If the total withheld exceeds the actual liability, you receive a refund. Use the Income Tax Calculator to see how progressive brackets work on your combined income.

The Tax-Free Threshold Explained

The tax-free threshold is the first $18,200 of annual income on which no income tax is payable. Every Australian resident taxpayer is entitled to this threshold, but you can only claim it with one employer at a time.

When you start a new job, your Tax File Number Declaration asks whether you want to claim the tax-free threshold. If you tick "yes" on both jobs, both employers withhold less tax, and you end up with a tax debt at the end of the financial year — often between $2,000 and $5,000.

Always claim the threshold on the higher-paying job to minimise under-withholding. See the PAYG Withholding Tables for the exact withholding rates with and without the threshold.

How to Optimise Tax Across Two Jobs

Workers with two jobs can take 3 practical steps to manage their tax position throughout the financial year.

1. Claim the tax-free threshold on the higher-paying job only. This ensures maximum withholding on the secondary income, reducing the risk of a year-end tax debt.
2. Request additional withholding. If you know the standard no-TFT rate will under-withhold, submit a withholding variation to the ATO or ask your employer to withhold extra from each pay.
3. Set aside tax from your second job. Put 30% of your second job income into a separate savings account. Any amount not needed for tax at EOFY becomes a bonus.

Use the Tax Return Calculator mid-year to estimate whether you are on track for a refund or a debt, and adjust your withholding accordingly.

Second Job Tax Comparison Table

The table below shows how withholding and actual tax differ at common second job income levels, assuming a primary job salary of $60,000.

Refund estimates are approximate. Actual results depend on deductions claimed and total assessable income. See the Australian tax brackets for the full rate schedule.

Frequently Asked Questions

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