Many Australians look to earn extra income with a second job. Whether you are taking on a temporary gig or something permanent, understanding the tax implications is important.
If you would like to learn how tax on second job income is calculated, this blog is for you. In this article, we will discuss what the tax brackets are, how your second job tax is calculated, do you pay more tax on a second job, whether you can claim the tax-free threshold on a second job, and if getting a second job is worth it.
What are the tax brackets?
Before discussing how second job tax works, it is important to understand how the tax brackets function. There is no specific second job tax rate as the rate is determined by how much is earned from combining your two jobs. Let’s look at what the tax brackets are for the year.
Income tax rates for 2024-25:
| Taxable income | Tax on this income |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
The tax rates on second job income are calculated using the ATO tax brackets.
How is the second job tax rate calculated?
The second job tax of a person is calculated by combining the income from both of their jobs. For example, if you earned $20,000 from one job and $50,000 from another, you simply combine the two incomes ($70,000 taxable income). You treat the two jobs as one, so you would also combine the deductions you want to claim from either job.
Alternatively, you can use One Click Life’s Second Job Tax Calculator which makes it easier to know how much tax you need to pay with a second job. Simply press “Add Job” and fill out the relevant information to calculate your second job tax.
Do you pay more tax with a second job?
It is a common misconception that you will pay more tax on your second job than if you earn the same amount on your primary job. Of course, you will pay more tax if you are earning more income, although the tax rate does not change by adding a second job.
Example of paying tax with two jobs:
| Income | Tax | |
| First job | $20,000 | $342 |
| First job + second job | $40,000 | $4,942 |
At first glance, it appears you are paying significantly more tax due to the additional income from a second job. This can be misleading as the tax would still be $4,942 if you earned $40,000 from only one job. The reason you only pay $342 of tax on your first job is due to the tax-free threshold.
Can you claim the tax-free threshold on two jobs?
If you are working two jobs, you may have wondered, “Can I claim the tax-free threshold on two jobs?”. Here are a few options for claiming the tax-free threshold with two jobs:
- If your combined income from both jobs is less than the tax-free threshold of $18,200, you can claim the tax-free threshold on your first and second job.
- If you earn more than the tax-free threshold from both jobs, you can only claim the tax-free threshold from one job.
If you are earning over the threshold and claiming the tax-free threshold on both jobs, you may owe the ATO money at the end of the year. Talk to a tax professional if you are earning over the threshold amount and claiming the tax-free threshold on both of your jobs.
Is getting a second job worth it?
Taking on a second job is completely up to your circumstances. If you find yourself needing extra cash at times, it might be beneficial to take on a second job. If you are not worried about your income and you would like a good work-life balance, getting another job may not be the best option.
If you would like to take on a second job but find yourself worried asking, “What are the tax rates on second job income?”, don’t worry. Regardless of the number of jobs you have, the only figures that matter are your combined job income and deductions. Use the One Click Life Second Job Tax Calculator to make life easier.
If you continue to stress about your taxes, One Click Life can help you!
One Click Life can increase your second job tax refund
The more deductions you make, the less tax you pay and the more money you have available for personal use. Working with an online tax agent like One Click Life can help minimise your tax payable whilst maximising your tax refund.
Understanding the tax on second job income is easy, and we can help you with it. One Click Life provides easy-to-use online tax returns on a platform operated by professionals in the field. Wills, mortgages, health insurance, and taxes can all take a lot of time and effort. One Click Life gives you a hassle-free method to arrange, monitor, and manage all your life’s administrative tasks in one location.