As living costs rise, many Australians are working two jobs (or multiple jobs!) to make ends meet. According to the Bureau of Statistics, 6.5% of the Australian workforce held multiple jobs in March 2025.
While working two jobs can boost your income, it’s important to understand how this affects your taxes at the end of the year. Some simple steps will help you to avoid a tax bill and, possibly, get a tax refund at year-end in July.
How Does Working Two Jobs Affect My Taxes?
Working two jobs in Australia impacts your taxes because each employer withholds tax based on the assumption that they are your sole employer. This can lead to underpayment of tax if not managed correctly.
Example: Understanding the Financial Implications of Two Jobs
Consider Alex, who has two part-time jobs:
- Job A: Earns $30,000 annually
- Job B: Earns $20,000 annually
If Alex claims the tax-free threshold ($18,200) from both employers, each will withhold less tax, assuming he earns only from them. At tax time, the Australian Taxation Office (ATO) will assess his total income ($50,000) and determine that insufficient tax was withheld, resulting in a tax bill. To avoid this, Alex should claim the tax-free threshold from only one employer—preferably the one where he earns more—and ensure the other employer withholds tax at the higher, “no tax-free threshold” rate.
Another possible problem with multiple jobs is that your total income puts you into a higher tax bracket, but each employer only withholds tax for a lower tax rate based on one of your incomes. We’ll dig into that more, below.
How to Avoid a Tax Bill If You Have More Than One Job
To prevent unexpected tax bills when working multiple jobs:
Be Careful Claiming the Tax-Free Threshold
Only claim the tax-free threshold from one employer, usually the one where you earn the most. This ensures the correct amount of tax is withheld from your income.
Two Jobs Might Increase the Tax Rate for Your Total Income
Having two jobs increases your total income, which may push you into a higher tax bracket. Each employer calculates tax withholding based on your income from them alone, potentially leading to under-withholding and an end-of-year ATO tax debt.
Re-Cap: How To Avoid Paying Extra Tax for Working Two Jobs
The rate of tax for working two jobs is often higher than the rate you pay at one job. Why? Because in Australia, the more you earn, the more tax you pay, as a percentage of your income. These steps help avoid the pain of a tax-payable when you do your tax return:
- Adjust Your Withholding: If your combined income from both jobs will put you into a higher tax rate, you can ask one or both of your employers to withhold a bit of extra tax, to cover any shortfall. This way, you’ll get little a bit less each payday, but at the end of the year you will owe less to the ATO—and you might get a tax refund!
- Only Claim the Tax-Free Threshold at One Job: We will really dig into this point, because this is the #1 mistake people make when working two jobs. Read more about this below.
- Set Aside Savings: Regularly save a small portion of your income to help cover any potential tax bills at the end of the financial year. If you are topping-up your income, that also tops-up your tax payable. Be prepared for a bit of a tax bill at the end of the year. If you save for it, tax time won’t be a problem.
When and How to Claim the Tax-Free Threshold
The tax-free threshold allows you to earn up to $18,200 per year without paying income tax. When your employer claims the tax-free threshold for you, they only withhold tax from your earnings above $18,200. However, when working multiple jobs, you should claim this threshold from only one employer to ensure the correct amount of tax is withheld.
Case Study: Claiming the Tax-Free Threshold on Both Incomes
Consider Tom, who has two part-time jobs:
- Job A: Earns $17,000 annually
- Job B: Earns $12,000 annually
Tom claims the tax-free threshold from both employers. Each employer assumes Tom has one job (he didn’t tell them) and they assume he earns less than $18,200 annually, so they withhold minimal or no tax. However, Tom’s combined income is $29,000, exceeding the tax-free threshold. At tax time, the ATO will determine that Tom owes tax on the amount over $18,200, and that means Tom has an ATO tax debt. To avoid this, Tom should have claimed the tax-free threshold from only one employer and informed the other to withhold tax at the higher rate.
Is It Legal to Have Two Jobs in Australia?
Yes, it definitely is legal to have multiple jobs in Australia.
One thing that would make a second job not legal is, if you try to hide your second job’s pay from the ATO. Trust us on this: The ATO will find your income and get tax out of you, eventually. Even if you go to lengths like depositing pay into an overseas bank, the ATO can still track it down. If you try to hide your second income, you could end up with an ATO tax debt that takes years to pay off.
Other legal points you may want to consider:
- Check Your Employment Contracts: Some employers have clauses restricting secondary employment.
- Ensure No Conflict of Interest: Your second job should not interfere with your primary job’s responsibilities or confidentiality agreements.
- Manage Your Health and Safety: Working multiple jobs can lead to fatigue, impacting your well-being and performance.
Employers are increasingly concerned about the risks associated with employees working multiple jobs, including reduced productivity and potential legal liabilities.
Is It Worth Working Multiple Jobs?
Working multiple jobs can provide additional income, which is beneficial for:
- Paying Off Debts: Extra earnings can help reduce financial liabilities.
- Saving for Goals: Whether it’s a holiday, education, or a home deposit, additional income accelerates savings.
- Gaining Experience: Diverse roles can enhance your skills and employability.
However, consider the potential downsides:
- Increased Fatigue: Long hours can impact your health and personal life.
- Tax Implications: As discussed, improper tax management can lead to unexpected bills.
- Work-Life Balance: Limited free time may affect relationships and personal well-being.
Assess your personal circumstances and consult with a financial advisor to determine if taking on a second job aligns with your goals and capacity.
How to Ensure You Get a Tax Refund When Working Two Jobs
To maximize your chances of receiving a tax refund:
- Keep Accurate Records: Document all income and work-related expenses. Remember to keep receipts for any work-related things that you pay for.
- Claim Eligible Deductions: At tax time, you can claim tax deductions for any work-related items your paid for, including uniforms, work-related travel, work-related education fees or books, and home office expenses.
- Claim the Tax-Free Threshold from Only One Employer: This ensures the correct amount of tax is withheld. Tell your employers that you have another income, and make sure only one employer applies the tax-free threshold.
- Consult a Tax Professional Like Etax: They can provide personalized advice and ensure you’re complying with tax laws.
By staying on top of your tax situation and seeking professional help, you can reduce the risk of unexpected tax bills and potentially, increase your tax refund.
Additional Considerations
When taking on a second job, consider:
- Superannuation: Ensure both employers are contributing to your superannuation, as required by law.
- Leave Entitlements: Understand how multiple jobs may affect your leave entitlements, especially if both are part-time or casual positions.
- Insurance: Check if your second job affects your insurance policies, including income protection, life insurance and health insurance.
Note: This information is general in nature and does not constitute professional financial advice. For personalized guidance, consult a registered tax agent or financial advisor.
Reference: ABS statistics about Australians working multiple jobs
