It’s a common misconception that working two or more jobs will increase the tax you pay at the end of the year. However, the Australian Taxation Office (ATO) only needs to know much your total taxable income is. They do not care how many jobs you have or how many different sources of income you have.
The only truth is that the more income you earn, the more tax you pay. Due to Australia’s tax system, the rate of tax for some of your income may be higher. When you commence a job, you must fill out a form that helps determine how much tax is taken out of your pay each cycle (depending on whether you get paid weekly, fortnightly etc.).
Generally, within the form, you would tick a box to indicate that you are eligible for the tax-free threshold of $18,200; this applies to all Australian residents. This then sets how much ‘Pay As You Go’ (PAYG) tax is deducted from pay each week/fortnight. The PAYG schedule is set by the ATO and must be followed by the employer.
For a second, subsequent job you would not tick that box about claiming the tax-free threshold as that has already been taken into account. You can only claim the tax-free threshold for one job. Therefore, the PAYG rate would be higher, so it can seem as though you are paying a higher tax rate.
At the end of the financial year, when you or your accountant do your tax return, the income from all of your jobs is added together to work out how much tax is payable, less the PAYG tax you have already paid.
