Taking on a second job in Australia can feel like you’re stepping up your hustle game. Whether you’re saving for a dream vacation, trying to knock down that pesky credit card debt, or just looking to boost your financial cushion, a second job can be a game-changer. But, as they say, with great income comes great responsibility—especially when it comes to taxes.
Here’s where things get interesting: you’ve probably heard someone complain, “A second job gets taxed way more!” or “It’s not worth it; the government just takes it all.” While these statements have a kernel of truth, they’re also wrapped in layers of misunderstanding. Don’t worry, though—we’re here to clear up the confusion.
The reality is that Australia’s tax system doesn’t have a special "second job penalty," but managing the tax on your extra earnings requires some know-how. How much you get taxed on your second job depends on your overall income, tax-free thresholds, and how well you understand the rules. Getting it right could mean more dollars in your pocket (and fewer surprises at tax time).
But it’s not just about crunching numbers. Picking up a second job can be a great opportunity to explore new skills, make new connections, or even try something completely outside your usual 9-to-5. It might mean late nights or weekend shifts, but it could also mean having extra cash for that next concert, upgrading your car, or just breathing easier when bills roll in.
In this article, we’ll break down everything you need to know about how much tax you’ll pay on a second job in Australia, how the system works, and how to avoid common pitfalls. By the end, you’ll feel confident about maximizing your second income and making it worth your while. Ready to demystify the second-job tax drama? Let’s dive in.
In Australia, your income tax is calculated on a progressive scale. This means the more you earn, the higher the percentage of tax you pay on income that falls within certain thresholds. As of the 2024–2025 financial year, the tax rates are:
The tax-free threshold is the amount of income you can earn before paying any tax. For most people, this is $18,200 per year.
When you take on a second job, it's important to note that the tax-free threshold only applies to one job—usually your primary source of income. Your second job is taxed at your marginal tax rate, which is determined by your total income from both jobs combined.
Let's say:
For the second job, your employer will typically withhold tax at a higher rate because you are not claiming the tax-free threshold for that role. This ensures that your overall tax obligations are covered.
A common misconception is that having a second job means paying "more tax." In reality, the tax rate applied to your second job isn't inherently higher. Instead, the higher rate reflects your combined income, which might push you into a higher tax bracket.
Your total income from both jobs determines how much tax you owe. If your second job pushes your total earnings into the next tax bracket, the higher rate will only apply to income earned above the threshold, not your entire earnings.
Managing tax across two jobs can get a little tricky, so here are some tips to make sure you're paying the right amount:
You should only claim the tax-free threshold for your primary job, where you earn the majority of your income. For your second job, inform your employer that you're not claiming the threshold by completing a Tax File Number (TFN) Declaration Form.
Your second employer will likely withhold a higher percentage of tax from your pay. This is to cover the expected tax you'll owe on your combined income. If you're unsure about the amount being withheld, use the ATO's PAYG withholding calculator to check if it's correct.
Keep an eye on your combined earnings from both jobs throughout the year to ensure you don't fall into a higher tax bracket unexpectedly.
If you think your second employer isn't withholding enough tax, you can ask them to withhold extra. This can help you avoid a surprise tax bill at the end of the financial year.
In addition to income tax, Australians are required to pay a Medicare levy of 2% of their taxable income. This will also apply to your combined income from both jobs.
At the end of the financial year, the Australian Taxation Office (ATO) will assess your total taxable income and compare it to the amount of tax you've already paid. Depending on how much tax was withheld by both employers, you may:
While managing taxes for a second job requires attention, the financial benefits can far outweigh the challenges. Here are a few tips to make the most of your extra income:
Plan for Superannuation: Your second employer is also required to contribute to your superannuation, which helps grow your retirement savings.
Taking on a second job in Australia is an excellent way to increase your earnings, but it’s important to understand how the tax system works to avoid surprises at tax time. While your second job is taxed at your marginal tax rate, this reflects your total income and ensures your tax obligations are met. By managing your tax properly and staying informed, you can maximize the benefits of your extra income and avoid unnecessary stress.
If you’re ever unsure about your tax situation, consulting with an accountant or tax professional is a wise move to ensure everything is in order.