Is a second job taxed higher in Australia? No – there is no second-job tax rate. Your wages from every job are added together and taxed under the same 2025-26 brackets as everyone else. What makes a second job feel heavily taxed is that you can only claim the $18,200 tax-free threshold from one employer, so the second employer withholds tax from the first dollar you earn.
This guide explains how the ATO treats income from more than one job, how to fill in the TFN declaration so you do not get a bill, what the extra income actually costs at each bracket, how HECS-HELP and the Medicare levy interact with a second job, and how to check your withholding mid-year. Figures are 2025-26 and were checked against the ATO on 6 October 2026.
The one thing to get right on day one of a second job is the tax-free threshold question on the TFN declaration. Get that right and the rest is arithmetic.
Key takeaways
- No higher rate. Tax is worked out on your total income across all jobs using the normal brackets – 16% to 45% in 2025-26 (the 16% rate becomes 15% from 1 July 2026).
- Claim the tax-free threshold once, from the job that pays the most. The second employer withholds at the “no tax-free threshold” rate.
- The marginal rate is what the second job costs you. On a $50,000 main job, every extra dollar is taxed at 30% plus 2% Medicare levy.
- HECS-HELP is on combined income. Repayments start above $67,000 in 2025-26 – a second job can tip you over.
- Check withholding in January. If total tax withheld is tracking below your estimated liability, ask one employer to withhold extra.
What a second job costs you in 2025-26
| Main job income | Marginal rate on second-job income | Tax on an extra $10,000 (incl. 2% Medicare levy) | You keep |
|---|---|---|---|
| $15,000 (under the threshold) | 0% then 16% once total passes $18,200 | About $1,200 | About $8,800 |
| $40,000 | 16% on income to $45,000, then 30% | About $2,500 | About $7,500 |
| $50,000 – $125,000 | 30% | $3,200 | $6,800 |
| $135,000 – $180,000 | 37% | $3,900 | $6,100 |
| $190,000+ | 45% | $4,700 | $5,300 |
Based on the ATO’s 2025-26 resident rates; ignores offsets and HECS-HELP. The 16% rate falls to 15% from 1 July 2026.
How is income from two jobs actually taxed?
Australia taxes you as one person with one total income. Your employers each withhold tax during the year as an estimate; at tax time the ATO adds up every income statement, works out the tax on the total under the brackets, subtracts what was withheld and either refunds the difference or sends a bill. Which job the money came from does not matter.
For 2025-26 the resident brackets are: nil to $18,200; 16% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000, plus the 2% Medicare levy for most people. Our guide to ATO tax rates for 2025-26 and 2026-27 has the full tables and the legislated cut to 15% on the second bracket from 1 July 2026.
Why does the second job feel like it is taxed more?
Because of the tax-free threshold. The first $18,200 of your income is tax-free, but the ATO lets you claim that threshold from one payer only, and it says to choose the one who pays you the most. That employer withholds nothing on your first $18,200 and normal rates above it. Your second employer withholds at the “no tax-free threshold” rate, meaning tax comes out of every dollar from the first pay. The second payslip therefore looks brutal, while the first looks generous. Over the year the two balance out against your real liability.
The mistake that creates a tax bill
Ticking “claim the tax-free threshold” on the TFN declaration for both jobs. Both employers then leave the first $18,200 untaxed, so $18,200 of income is under-withheld. On a 30% marginal rate that is a bill of over $5,000 at tax time, with no warning. If you have done this, give the second employer a new TFN declaration with “No” selected. See the two-jobs tax-free threshold mistake for how to recover.
How do you fill in the TFN declaration for a second job?
- Complete the TFN declaration your second employer gives you (paper, or through their payroll software or ATO online services).
- At the question “Do you want to claim the tax-free threshold from this payer?”, select No unless this job will be your highest-paying one – in which case claim it here and lodge a new declaration with “No” at your other job.
- If you have a HECS-HELP or other study loan, tick that you have one. The employer then withholds extra towards your compulsory repayment, which stops a nasty surprise at tax time.
- Quote your TFN. Without it the employer must withhold 47%. If you have lost it, see how to find your TFN.
If your total income from all jobs will stay under $18,200 for the year – a student with two casual jobs, for example – you can claim the threshold from the second payer too, because no tax will be due. The ATO’s PAYG withholding rules allow it; just make sure you are right about the total.
Two worked examples
Example 1: Alex – $50,000 main job plus $10,000 second job
Alex’s total income is $60,000. Tax on $60,000 in 2025-26 is $8,788 ($4,288 on the first $45,000 plus 30% of $15,000) plus $1,200 Medicare levy. On $50,000 alone it would have been $5,788 plus $1,000 levy. So the $10,000 second job costs Alex $3,200 in tax and levy – 32 cents in the dollar – not because it is a second job, but because every one of those dollars sits in the 30% bracket with the 2% levy on top. (The Low Income Tax Offset also shrinks by about $150 between $50,000 and $60,000, so the true cost is closer to 33.5 cents.)
Example 2: Priya – $130,000 main job plus $20,000 freelance income
Priya’s total is $150,000. The first $5,000 of extra income fills the rest of the 30% bracket (to $135,000); the next $15,000 is taxed at 37%. Tax on the extra: $1,500 plus $5,550 plus $400 Medicare levy, about $7,450, or 37 cents in the dollar. Because Priya’s freelance client does not withhold tax, she should set the money aside or enter PAYG instalments, otherwise the whole amount is a bill at tax time. She can also claim deductions against that income – see tax deductions for IT professionals as an example of what a side business can claim.
What about HECS-HELP and the Medicare levy?
Both are calculated on your total income, not job by job. The Medicare levy is 2% of taxable income once you are above the low-income threshold ($28,011 for singles in 2025-26, phasing in to $35,013). A second job that lifts you over the threshold brings the levy in on all of your income.
HECS-HELP matters more. From 1 July 2025 compulsory repayments use a marginal system: nothing on repayment income up to $67,000; 15c for each dollar from $67,001 to $125,000; $8,700 plus 17c for each dollar from $125,001 to $179,285; and 10% of total repayment income above that. For 2026-27 the first threshold rises to $69,528. If your main job pays $60,000 and a second job adds $12,000, you now owe a $750 repayment that may not have been withheld unless you told the second employer about the loan. The ATO’s study loan repayment thresholds page has the full table.
How do you avoid a bill at tax time?
- Claim the threshold once, from the higher-paying job.
- Declare your study loan on every TFN declaration.
- Check in January. Add up year-to-date tax withheld on both payslips and compare with the tax on your projected total income using an income tax calculator. If withholding is short, ask one employer to withhold a fixed extra amount per pay – the ATO allows an upward variation at any time.
- Keep receipts for both jobs. Deductions for uniforms, tools, travel between workplaces on the same day, and self-education reduce your total taxable income, whichever job they relate to.
- Set money aside for contract or ABN income. Nobody withholds for you; put aside your marginal rate plus 2% from each payment, or enter PAYG instalments.
Rule of thumb
Your second job is taxed at your marginal rate plus 2%: 32 cents in the dollar for most full-time workers, 39 cents from $135,000 and 47 cents from $190,000. If the second payslip is withholding roughly that, you are on track. If it is withholding much less, the tax-free threshold is probably being claimed twice.
Common myths about second-job tax
- “A second job is taxed at 45% automatically.” No. The second employer withholds at the no-threshold rate, which starts at 16%, not 45%.
- “You cannot claim deductions against a second job.” You can; deductions reduce your total taxable income.
- “If I keep each job under $18,200 I pay no tax.” The threshold applies to your combined income once per year, not per job.
- “Getting a refund means the second job was taxed too much.” It usually means the no-threshold withholding slightly over-collected – the system working as designed.
FAQ about tax on a second job
Is a second job taxed at a higher rate in Australia?
No. There is no special rate for second jobs. All your income from every job is added together and taxed under the normal brackets. The second job feels heavily taxed because you cannot claim the $18,200 tax-free threshold from it, so tax is withheld from the first dollar – but at tax time everything is squared up on your total income.
Should I claim the tax-free threshold on my second job?
Generally no. The ATO says to claim it from one payer only, usually the one paying you the most. Claim it from both and both employers withhold too little; the shortfall becomes a tax bill at the end of the year. The exception is where your total income from all jobs will stay under $18,200.
Why did I get a tax bill after starting a second job?
Almost always because the tax-free threshold was claimed from both employers, or because the second job pushed total income into a higher bracket while the second employer was withholding as if it was your only income. HECS-HELP repayments on combined income are another common cause.
How much tax will I pay on a $10,000 second job?
It depends on your total income. If your main job pays $50,000, the extra $10,000 sits in the 30% bracket, so about $3,000 tax plus $200 Medicare levy in 2025-26 – roughly $3,200, or 32 cents in the dollar. If your main job pays $140,000 the extra is taxed at 37% plus 2%.
Does a second job affect HECS-HELP repayments?
Yes. Compulsory repayments are calculated on your total repayment income from all sources. For 2025-26 nothing is repayable up to $67,000, then 15c for each dollar between $67,001 and $125,000. A second job that lifts you over $67,000 creates a repayment that neither employer may have withheld for – tell the second employer you have a study loan.
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If you juggle two employers, casual shifts, or wages plus ABN work, Nanak Accountants can check your withholding mid-year, sort out a double-threshold mistake before it becomes a bill, and make sure every deduction across both jobs is claimed. Call 1300 626 258 or book your free 15 minute consultation. For more ways to pay less tax in Australia, see our guide. Agents working with the ATO on your behalf use the ATO tax agent portal.
This article is general information only and is not personal financial or tax advice. Tax brackets, Medicare levy thresholds and study loan repayment thresholds were checked against ATO sources on 6 October 2026.
