Why do I owe tax when I have two jobs?
You only get one tax-free threshold for the whole year, but each payer works out your tax as if its job were the only one. If both claim the threshold, too little is taken out. Even if you claim it from one job only, the second job's rate often doesn't match the 30c plus Medicare your extra dollars really cost, so a smaller bill can still arrive. You can fix it by asking a payer to take out more.
The short version
- Claiming the threshold twice leaves Sam about $5,779 short, and even claiming it once leaves him about $2,399 short, which about $92 extra a fortnight would cover.
- That's different. If you leave one job and start another, you can claim the threshold from the new payer even if you claimed it from the old one.
- No. All your income is added together and taxed at the same rates. The second job just withholds as if it were your only income, or without the threshold, which often doesn't match your real top rate.
You did the responsible thing and picked up a second job. Then tax time came, and instead of a refund there was a bill. It feels unfair, a bit like being punished for working harder.
You're not being taxed extra for having two jobs. The tax is just being collected in the wrong amounts along the way. Here's why, and the simple fix.
One threshold, two payers
The first $18,200 of your taxable income each year is tax-free. That's one $18,200 across all your jobs, not one per job. The ATO says that if you have more than one payer at the same time, you generally only claim the tax-free threshold from one of them.
Each payer only sees its own pay. It works out what to withhold as if that pay were your whole income. So a second job that also claims the threshold treats your first $18,200 there as tax-free too, even though your main job has already used it.
What it looks like in real numbers
Worked example
Sam, a warehouse worker with a weekend bar job
Example only. Sam is an example person in Townsville. His main job pays $2,268 a fortnight and his bar job pays $742 a fortnight, 26 pays each. He has no work expenses, so the $1,000 standard deduction applies. Withholding amounts are from the ATO's fortnightly withholding sample data, published in June 2026 alongside the tax tables that apply from 1 July 2026.
| Step | Sum | Result |
|---|---|---|
| Total wages for the year | ($2,268 + $742) x 26 | $78,260 |
| Taxable income | $78,260 - $1,000 | $77,260 |
| Income tax at 2026-27 rates | $4,020 + 30% x ($77,260 - $45,000) | $13,698 |
| Medicare levy | $77,260 x 2% | $1,545.20 |
| Real tax for the year | $13,698 + $1,545.20 | $15,243.20 |
| Withheld if both claim the threshold | ($362 + $2) x 26 | $9,464 |
| Bill at tax time | $15,243.20 - $9,464 | about $5,779 |
| Withheld if only the main job claims it | ($362 + $132) x 26 | $12,844 |
| Bill at tax time | $15,243.20 - $12,844 | about $2,399 |
| Extra to withhold each fortnight | $2,399.20 / 26 | about $92 |
Claiming the threshold twice leaves Sam about $5,779 short, and even claiming it once leaves him about $2,399 short, which about $92 extra a fortnight would cover.
His income is above $66,667, so the low income tax offset doesn't apply. Ignores other offsets, deductions and 27-pay years. Example only.
Why ticking the right box isn't always enough
Sam's case shows the part most people miss. His second job, with no threshold claimed, takes out $132 on $742. That's about 18c in the dollar. But every dollar from that job sits on top of his main job, in the 30% band, and really costs 30c plus 2c Medicare levy.
So even doing everything right, a second job of this size can leave a gap.
How to avoid the bill
- Claim the tax-free threshold from one payer only, usually the one that pays you the most. Use a withholding declaration to change it with a payer you already work for.
- Ask a payer to withhold more. The ATO says you can ask one or more payers to increase the amount they withhold. The request should be in writing and can be in any format.
- Or set it aside yourself. Move a fixed amount each payday into a separate account. For Sam it's about $92 a fortnight.
- Check again if your hours change. A bigger second job means a bigger gap.
HELP and two jobs
The same thing happens with HELP. Withholding for HELP starts at $2,674 a fortnight from a payer where you claim the threshold, and at $1,974 a fortnight from one where you don't. Two smaller jobs can each sit under those lines, while your total income is well over the $69,528 repayment threshold for 2026-27. Answer yes to the study loan question on the TFN or withholding declaration you give each payer.
Check where you're at before June
You don't have to wait for tax time to find out. A rough check takes ten minutes.
- Add up your expected gross pay from both jobs for the year.
- Take off $1,000 for the standard deduction if you have no work expenses, or your expected claims if they're bigger.
- Put the result into the Moneysmart income tax calculator for 2026-2027 to get the tax and Medicare levy for the year.
- Add up the tax withheld so far on your latest payslips, then add what each job will withhold for the rest of the year.
- If the withholding total is lower, the difference is roughly your bill. Divide it by the pays left and ask for that much extra.
It won't be to the dollar, because offsets, other income and deductions all move it. It will tell you if you're close or a long way off.
If you already owe
A bill like this is simply the tax that wasn't collected along the way, so it can help to think of it as money that was always going to the ATO. Once it's sorted, fix the withholding so next year doesn't repeat it.
Contact the ATO about the debt rather than ignoring it. If money is tight, the National Debt Helpline on 1800 007 007 offers free, confidential financial counselling.
Key numbers
| What | Figure and source |
|---|---|
| 2026-27 resident tax rate, $45,001 to $135,000 | $4,020 plus 30c for each $1 over $45,000 ATO |
| Medicare levy | 2% ATO |
| Tax-free threshold | $18,200, nil tax ATO |
| One payer only | Generally claim from one payer ATO |
| Ask payers to withhold more | Upward variation ATO |
| Tax bill if under-withheld | Bill ATO |
Free official help
- ATO: Income from more than one job
The official rules on the tax-free threshold with two payers. - ATO: Withholding declaration
Change your threshold claim or study loan details with a payer. - ATO: Tax rates for Australian residents
The 2026-27 rates your total income is taxed at. - Moneysmart: Income tax calculator
Estimate tax on your combined income for 2026-2027. - National Debt Helpline, 1800 007 007
Free, confidential financial counselling if a tax bill is a worry.
Questions people ask
Is a second job taxed at a higher rate?
No. All your income is added together and taxed at the same rates. The second job just withholds as if it were your only income, or without the threshold, which often doesn't match your real top rate.
Which job should I claim the tax-free threshold from?
Generally just one. Most people pick the one that pays the most. The ATO page on income from more than one job explains the options.
Can I claim the threshold from both if my total is under $18,200?
The ATO's withholding declaration says you can answer yes if your total income will stay under the threshold. Check that it really will.
How do I get more tax taken out?
Ask your payer in writing for an upward variation. The ATO says it can be in any format.
Get the free pay check sheet
Type in one fortnight's pay and bills and see where it all goes. Works in Excel and Google Sheets.
Keep reading
Sources
- Income from more than one job. https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/income-from-more-than-one-job, accessed 2026-10-16.
- Tax rates: Australian residents. https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents, accessed 2026-10-16.
- PAYG withholding Schedule 1: withholding amounts sample data. https://www.ato.gov.au/tax-rates-and-codes/payg-withholding-schedule-1-statement-of-formulas-for-calculating-amounts-to-be-withheld/sample-data/withholding-amounts-sample-data, accessed 2026-10-16.
- Withholding declaration. https://www.ato.gov.au/forms-and-instructions/withholding-declaration, accessed 2026-10-16.
- Study and training support loans fortnightly tax table. https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-fortnightly-tax-table, accessed 2026-10-16.
- Study and training support loans rates and repayment thresholds. https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds, accessed 2026-10-16.
- Low and middle income earner tax offsets. https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/tax-offsets/low-and-middle-income-earner-tax-offsets, accessed 2026-10-16.
- Standard deduction for work-related expenses. https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/standard-deduction-for-work-related-expenses, accessed 2026-10-16.
- National Debt Helpline. https://ndh.org.au, accessed 2026-10-16.