How does tax work on a second job?

Second jobs usually have a higher amount of tax withheld from your pay. This is because you are already claiming the tax-free threshold from another paying job.

Withholding tax at a higher rate means that you are less likely to have a tax debt at the end of the income year.

When you start a job, your new employer will give you a Tax file number declaration to complete. When you fill in this form you can choose whether to claim the tax-free threshold from your employer.

When you fill in this form you can choose whether to claim the tax-free threshold from your employer. If you:

  • are still earning income from your first employer, you should not claim the tax-free threshold for your second job
  • are no longer earning any income (including from paid leave), then you are entitled to claim the tax-free threshold from your second job and have a lower rate of tax withheld
  • start receiving income from both employers, you can request that one employer withholds at a higher rate to avoid a tax debt at the end of the year.

Choosing to pay a higher rate of tax on your second job, will benefit you in the long run. If you have any further questions about your personal tax and finances, don’t hesitate to get in touch. We’re here to help.