Changing Jobs or Juggling Two? Avoid Tax-Time Surprises with the Right Threshold Choice

When you have more than one job or switch employers mid-year, it’s essential to understand how the tax-free threshold works so you don’t get caught by surprise at tax time. 

The tax-free threshold means that if you’re an Australian resident for tax purposes, you can earn up to $18,200 in a year without paying income tax. 

Multiple Jobs

If you’re working for more than one employer (or have income from a government agency or as a sole trader) at the same time, the rule is: you should generally claim the tax-free threshold from only one employer — ideally the one that pays you the most.

If you claim the threshold from more than one employer while your combined income exceeds $18,200, you may not have enough tax withheld during the year and could end up with a tax bill when you lodge your return. 

If your total income across all jobs is going to stay under $18,200, you could claim the tax-free threshold from more than one employer — but this situation is less common. 

Changing Jobs Mid-year

If you leave one job and start another, you can claim the threshold with your new employer even if you claimed it with your previous employer. The key is to complete a new Tax File Number (TFN) declaration for your new employer and decide whether to claim the threshold with them.

Tax Withheld And Your End-Of-Year Result

At the end of the financial year, the ATO adds together all your income from all sources and compares it to the tax already withheld. If you’ve had too much tax withheld, you may get a refund; if too little, you may have a tax bill.

If you realise early in the year that your combined incomes will put you well above the threshold (or you’ve claimed the threshold incorrectly), you can ask your employer(s) to adjust how much tax is withheld. This might be through a PAYG withholding variation.

Tips To Stay On Top Of Things

  • Work out which job is your “main” job (the higher-paying one) and claim the threshold there.
  • For your second (or third) job(s), let those employers know you are not claiming the threshold, so sufficient tax is withheld.
  • Keep track of all your jobs and income during the year, including any casual work or side-hustle under an ABN.
  • If you change jobs, complete the TFN declaration afresh and let the new employer know your status.
  • If you’re unsure or your situation is complex (e.g., multiple income streams, business income, study-loan repayments), consider speaking with a tax professional.

By following these steps, you can help avoid unpleasant surprises when tax time arrives, and you give yourself greater certainty and control of your finances.