If, like many Australians, you have worked or are working more than one job you have probably found yourself in the position of whether or not to claim the tax-free threshold on one or more of your jobs.
While everyone wants to make sure they do the right thing when it comes to paying their taxes, it can be tricky to know what exactly that is.
According to the Australian Taxation Office (ATO), it is possible to claim the tax-free threshold on more than one job but only if you meet requirements.
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“If your total annual income will be less than $18,200, you can claim the tax-free threshold from both jobs,” an ATO spokesperson explained.
“Keep in mind that if you earn more than $18,200, you’ll likely receive a tax bill at the end of the year.”
For example, if you are claiming the tax-free threshold from your first employer they won’t withhold any of your income for tax purposes on the first $18,200 you earn.
However, for your second or even third job, you will be taxed from the first dollar you earn.
The important thing to remember is that while it can certainly feel like you’re paying more tax from your second job, this is not the case.
“You don’t pay extra tax for having a second job. You pay the same amount of tax whether you earn $1,000 a week from a single job or across multiple jobs,” the ATO spokesperson said.
“When you do your tax return, we add all your income together and calculate the tax you need to pay based on your combined income.”
And if you finish up with your first job to focus on the second there is no need to worry. You will automatically stop claiming the tax-free threshold from them when they stop paying you.