The alarm goes off at 5am, but you’re not just heading to your day job—you’re building something more. Whether you’re driving for a rideshare provider after hours, selling handcrafted items online, or picking up weekend shifts at a second workplace, you’re part of a growing movement of Australians with multiple income streams.
Earning income from multiple sources is a powerful strategy to accelerate your financial goals and possibly even pursue your passions. A second job might help you save for your dream home, pay off debt faster, or fund the startup you’ve been planning. But when tax season arrives, your clever income-boosting strategy can quickly turn into a compliance headache.
What can you claim? How much tax will you have to pay? Will you be penalised? These can be tricky questions, but once you’ve reached the end of this article, you’ll have a clearer idea of what you need to do (and what you should avoid at all costs).
In this comprehensive guide, we’ll demystify the tax implications of working multiple jobs. You’ll learn:
- How to properly structure your tax withholding across multiple employers
- When and how to claim the tax-free threshold correctly
- Which expenses you can legitimately claim as deductions
- How to handle travel between workplaces for maximum tax benefits
- Ways to manage side hustle income to avoid unexpected tax bills
- Strategies to smooth your tax payments throughout the year
- Common pitfalls to avoid that could trigger an ATO audit
The most important thing to know first is whether to claim the tax-free threshold or not.
What Is The Tax-Free Threshold?
In Australia, the tax-free threshold is $18,200. This means that if you earn $18,200 or below, you are not obligated to pay income tax. When you earn more than $18,200, you’ll need to start paying income tax on the excess.
As a quick guide, if you earn more than $350 a week; $700 a fortnight; or $1,517 a month, you’ll need to pay income tax.
When you start working, your employer will ask you to fill out a Tax File Number Declaration Form to complete before you start work. You’ll need to state whether you want to claim the tax-free threshold on this form. If you only have one employer – always say YES.
Your employer will then take out income tax and pay it to the Australian Taxation Office (ATO) on your behalf with each pay period. If, at the end of the financial year, you have earned less than $18,200, you can claim back all your tax payments. If you’ve earned over $18,200, you’ll need to pay income tax, but your employer should have deducted enough tax to net you a small refund.
You can claim your work expenses as tax deductions in order to reduce the tax payable further, giving you even more of your tax back.
Pro Tax Tip: Don’t forget, payments from Centrelink are taxable income. They will ask you to fill out the same form if you receive payments from them.
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What If You Have More Than One Employer?
Some people work more than one job at the same time. Others earn an income from an employer while also receiving a taxable pension or government allowance.
The ATO require that you only claim the tax-free threshold from one employer, or payer. To do this, claim the tax-free threshold on the amount you earn the highest salary or wage from. This means you will have tax deducted at the lowest marginal tax rate for your income bracket.
On the tax file number application form for the other employer or payer, select NO for claiming the tax-free threshold. Your second employer will withhold tax from a higher marginal tax bracket. This is done to ensure you’ll be able to meet your end-of-year tax obligations and reduce the likelihood of you owing tax.
It’s pretty unpleasant getting taxed so heavily for your second job. But try not to stress about it. If you’ve paid too much tax, you’ll be able to claim the overpayment when you lodge your tax return.
What If You Earn $18,200 Or Less?
If you work multiple jobs but expect your combined annual income from all sources to remain below $18,200, you have a unique situation. According to the ATO, you can claim the tax-free threshold from all of your employers in this scenario.
Here’s how to handle it correctly:
When starting each job, complete your Tax File Number Declaration form and select “Yes” to claiming the tax-free threshold for each employer. This tells your employers not to withhold tax from your wages (or to withhold at a reduced rate), since your total income falls within the tax-free threshold.
If you’re making this choice, you’ll need to use a tax calculator to monitor your income carefully throughout the year. Should your circumstances change, and you realise you’ll earn more than $18,200 in total, you’ll have to:
- Complete a Withholding Declaration form (available from the ATO)
- Submit this form to your secondary employer(s)
- Select NO to claiming the tax-free threshold from these employers
This ensures your secondary employers will start withholding the correct amount of tax, helping you avoid an unexpected tax bill at the end of the financial year.
Pro Tax Tip: Even if you’re earning below the tax-free threshold, it’s still important to lodge a tax return. This allows you to claim any tax that was withheld and potentially access other tax offsets or benefits you may be entitled to.
What If You End Up Paying Too Much Tax?
If you end up earning more than $18,200 per year and your employer or payer has withheld too much tax, you can apply to have the tax withheld reduced by completing and lodging a PAYG withholding variation application.
The ATO will then calculate how much tax you’re overpaying and let your employers or payers know.
Pro Tax Tip: Only do this if you’re sure of your income amounts or are disadvantages by current withholding rates. Typically, this form may be filled in when you are claiming negative gearing on an investment property and you don’t want to wait until you lodge your tax return to get your additional tax back.
Paying Too Little Tax?
If you’ve paid too little tax throughout the year, you’ll need to cover the shortfall when you lodge your return. As you can imagine, this isn’t a fun situation to find yourself in. So again, your best bet is to monitor your income and tax rates regularly, and ask your employer to increase your PAYG withholding tax if necessary.
Discovering you owe the ATO money can create significant stress, especially when it comes out of nowhere. If you get hit with a tax bill you can’t pay immediately, don’t panic. The ATO offers several options to help you manage unexpected tax debts:
- Payment plans: The ATO allows eligible taxpayers to spread your tax debt over manageable installments. You can apply online through myGov for debts up to $100,000, or call the ATO directly for larger amounts.
- Interest charges: Remember that the ATO typically applies a general interest charge (GIC) to unpaid tax debts. Setting up a payment plan right away can often save you from this interest, but we obviously can’t guarantee that. What we can say is that it’s always best to act promptly when you have a tax bill rather than putting it off for another day.
- Hardship provisions: If paying your tax debt would cause serious financial hardship, you might qualify for release from some or all of your debt. This requires clear evidence of genuine financial difficulty.
To prevent tax shortfalls in future years, take these proactive steps:
- Review your tax situation mid-year to ensure your withholding amounts align with your actual income
- Calculate your expected annual income across all sources around December/January
- If it’s looking like you’ll end up with a debt, ask your highest-paying employer to withhold additional tax
- Consider making voluntary PAYG installment payments directly to the ATO quarterly
- Create a dedicated savings account for tax, and transfer a percentage of any additional income
Pro Tax Tip: Having an ITP accountant complete your tax return ensures you claim every deduction, credit, and tax offset you deserve, reducing your chances of facing a surprise tax bill. ITP also provides free year-round tax advice to help you plan for your tax obligations, no matter how complex your income sources. This preventative approach can save you significant stress and potentially thousands of dollars over time.
Marginal Tax Rates
In Australia, the ATO sets marginal tax rates that take a percentage of your overall earnings. For each dollar you earn over the tax-free threshold, you’ll have to pay a certain amount.
For the 2024-25 financial year, the highest marginal tax rate in Australia is 45% for taxable incomes of $190,001 and over. You’ll also have to pay an amount for the Medicare Levy and/or Medicare Levy surcharge. To learn more about this, visit our guide to the Medicare Levy and which Australians are exempt.
There are different marginal tax rates for residents, foreign residents, and working holiday makers. Let’s take a look at the 2024-25 rates.
Resident tax rates for the 2024-25 income year (not including 2% Medicare surcharge)
| Taxable Income | Tax On This Income |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 16 cents for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30 cents for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37 cents for each $1 over $135,000 |
| $180,001 and over | $51,638 plus 45 cents for each $1 over $190,000 |
Foreign resident tax rates for the 2024-25 income year
| Taxable Income | Tax On This Income |
| 0 – $120,000 | 32.5 cents for each $1 |
| $120,001 – $180,000 | $39,000 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $61,200 plus 45 cents for each $1 over $180,000 |
Working holiday maker tax rates for the 2024-25 income year
| Taxable Income | Tax On This Income |
| 0 – $45,000 | 15% |
| $45,001 – $135,000 | $6,750 plus 30 cents for each $1 over $45,000 |
| $135,001 – $190,000 | $33,750 plus 37 cents for each $1 over $135,000 |
| $190,001 and over | $54,100 plus 45 cents for each $1 over $190,000 |
Note: Australia’s marginal tax rates changed significantly in the 2024-25 financial year thanks to the Stage 3 Tax Cuts. If you’d like to learn more about this significant upgrade to the tax system and how it’s affected your income, check out our complete guide to the Stage 3 Tax Cuts.
What If You’re Under 18?
The ATO applies different tax rules to minors (under 18) primarily to prevent income-splitting arrangements where parents might divert income to their children to reduce their own tax liability. However, for most young people working regular jobs, the tax situation is straightforward.
If you’re under 18 and earn income from:
- Employment (wages from a job)
- A business you actively participate in
- A deceased estate
You qualify as an “excepted person” with “excepted income,” and the ATO taxes this income at the same rates as adults. This means you get the full tax-free threshold of $18,200 and the standard progressive tax rates above that amount.
For example, a 16-year-old working at a fast-food restaurant after school pays exactly the same tax rates as their 25-year-old colleague working the same shifts.
The higher tax rates only apply to “unearned income” for minors, such as:
- Interest from bank accounts
- Dividends from shares
- Trust distributions
- Rental income from properties gifted to minors
These types of passive income face higher tax rates:
- The first $416 of unearned income is tax-free
- Income between $417 and $1,307 is taxed at 66%
- Income above $1,307 is taxed at 45%
Most working teenagers simply need to:
- Apply for a Tax File Number (TFN)
- Complete a Tax File Number Declaration form when starting a job
- Lodge a tax return if they earn more than the tax-free threshold or have tax withheld
The different tax rules for minors primarily target sophisticated tax planning arrangements rather than young people earning wages from genuine employment.
Second Job Tax Deductions
You can claim deductions for all of your jobs on the same tax return. However, the ATO treats each job separately when it comes to work-related expenses.
Some key points to remember:
- Track expenses by job: Keep separate records for each income source.
- Apportion shared expenses: Your mobile phone might be 30% primary job, 20% side hustle, and 50% personal use.
- Watch for overlap: Some items like professional memberships might apply to multiple roles.
Common second job deductions include:
- Tools and equipment specific to that role
- Protective clothing and uniforms (not regular business attire)
- Travel between workplaces on the same day (more on that below)
- Home office expenses for after-hours work
- Professional development directly related to your additional job
Second Job Tax Deductions: Real-life Examples
Consider a nurse who also works as a personal trainer. She can claim nursing scrubs, professional registration fees, and specialised shoes for her hospital role. Meanwhile, she can deduct fitness equipment, liability insurance, and relevant certifications for her training business. Travel directly from the hospital to the gym could also be deductible, unlike her regular commute.
We find clients often miss legitimate second job deductions. A retail worker who drives for a rideshare company might not realise they can claim car maintenance, cleaning, phone mounts, and even a portion of their music streaming service for driving shifts, while separately deducting uniform items and required footwear for their store position.
Record-keeping becomes doubly important with multiple income streams. The ATO looks particularly closely at claims across different jobs. Using the myDeductions tool in the ATO app helps separate expenses by employment type.
Remember: Tax minimisation through legitimate deductions is perfectly legal—just keep proper documentation to support your claims.
Deducting Travel Between Work Locations
Many Australians are unaware they can claim travel expenses between different workplaces. This often-overlooked deduction is particularly valuable when you’re juggling multiple jobs. The ATO allows you to claim travel expenses when you move directly from one workplace to another without stopping at home.
For example, if you work at a café in the morning and then head straight to your retail job in the afternoon, the cost of that journey could be tax-deductible. This applies whether you drive your own vehicle, take public transport, or use rideshare services.
Pro Tax Tip: Keep meticulous records of your travel between workplaces. A digital logbook app can track journeys and calculate deductions automatically. For public transport users, keep receipts or statement records of your transport card. The ATO may request evidence during an audit, and poor record-keeping can result in denied claims.
Remember that travel from home to your first workplace, or from your last workplace to home, remains non-deductible. The deduction applies only to the direct travel between separate work locations.
Managing Your Side Hustle Tax Obligations
The gig economy continues to thrive in 2025, with many Australians supplementing their income through side hustles. Whether you’re delivering food, selling handcrafted items online, or consulting on weekends, understanding how to manage your tax obligations properly can save you from unexpected tax bills.
A common misconception is that small amounts earned from side hustles don’t need to be declared. The reality is that, outside of hobby income, every dollar earned must be reported on your tax return, regardless of the amount. The ATO’s data-matching capabilities have expanded significantly in 2025, making unreported income increasingly difficult to hide.
Pro Tax Tip: The PAYG instalment system works particularly well for side hustles with inconsistent income. Rather than facing a substantial tax bill at year-end, you can make quarterly payments based on your estimated earnings. This smooths your cash flow and prevents the shock of a large lump-sum payment.
Perfecting Your Taxes With Multiple Income Streams
Balancing tax obligations across multiple income streams requires more than a casual understanding of ATO guidelines. It demands knowledge of which expenses overlap, which remain separate, and how to document everything properly. Most people would rather spend their precious time actually earning from their second job than reading tax rulings about it.
This is why it’s so important to have a tax professional in your corner. As ITP accountants, we see countless Australians struggling to maximise deductions across various jobs while staying compliant. Tax rules change frequently. Yesterday’s legitimate deduction might become tomorrow’s audit trigger. That part-time graphic design work might have different claim criteria than your full-time retail position. Those differences matter.
If your tax situation involves multiple employers or side hustles, an ITP Accounting Professional can ensure you pay the right amount—not a dollar more, not a dollar less. We’ll help you claim every legitimate deduction while keeping the ATO happy.
Phone 1800 367 487 to chat with a Professional today about turning your multiple income streams into maximum tax efficiency.