Key Highlights

  • Claiming the $18,200 tax-free threshold with two employers means both withhold as if it were your only job.
  • A hypothetical worker earning $40,000 plus $25,000 could be about $5,730 short in 2026–27.
  • Only one employer should have the tax-free threshold box ticked.
  • Changing your tax declaration can correct the withholding.

Picked up a second job, a weekend shift or extra casual hours this year? How you filled in each new employer's tax file number declaration could decide whether your next tax return brings a refund or a bill. Claiming the $18,200 tax-free threshold with more than one employer at the same time means each one withholds tax as if it were your only job. Across the year, that can leave thousands of dollars of tax unpaid.

The 2025–26 lodgment deadline for self-preparers passed on 2 November, and notices of assessment are now arriving. For anyone surprised by an amount owing, a doubled-up threshold is one of the first things to check, and it is easy to fix for the rest of 2026–27.

What the tax-free threshold box actually does

When you start a job, the tax file number declaration asks whether you want to claim the tax-free threshold. Ticking yes tells that employer not to withhold tax on the first $18,200 of yearly income it pays you.

The threshold is real. Australian residents pay no income tax on the first $18,200 of taxable income. But it applies once, to your total income for the year, not once per employer.

The long-standing ATO guidance is to claim the threshold from only one payer at a time, usually the one paying the highest wage, unless your total income from all jobs will be below $18,200. Other employers should then withhold at the higher, no-threshold rate.

How the bill builds up

Each employer only sees the pay it provides. If two employers both apply the threshold, each one withholds as though your income from it is all you earn.

The tax system, however, assesses the combined total. Two moderate incomes added together can push you into a higher tax bracket, and the threshold you were given twice is only counted once.

Reports on 1 October 2026 said that claiming the threshold with several employers can cause each to withhold too little tax. It also noted that not asking for extra Withholding to cover a HELP Debt can leave people with a bill.

Hypothetical example: two jobs, two ticks

The figures below are hypothetical and simplified. They use the 2026–27 resident tax rates, the first year of the lower 15% bottom rate. They exclude the Medicare levy and tax offsets, which would change the final result.

The 2026–27 rates are nil on income up to $18,200, 15% on $18,201 to $45,000, 30% on $45,001 to $135,000, 37% on $135,001 to $190,000 and 45% above $190,000.

Consider a worker earning $40,000 a year from a day Job and $25,000 from a weekend job, with the threshold claimed at both.

Treated as a stand-alone income, $40,000 attracts tax of 15% on the $21,800 above $18,200. That is $3,270.

Treated as a stand-alone income, $25,000 attracts 15% on the $6,800 above $18,200. That is $1,020.

So the two employers, between them, are aiming to withhold about $4,290 for the year.

Now the real position. Combined income is $65,000. Tax is 15% on the $26,800 between $18,200 and $45,000, which is $4,020, plus 30% on the $20,000 above $45,000, which is $6,000. Total tax is $10,020.

The shortfall is $10,020 less $4,290, or $5,730, before the Medicare levy and offsets.

Dropping the threshold at the weekend job helps, but may not be the whole answer. On a simple 15% basis with no threshold, tax on the full $25,000 would be $3,750. Added to the $3,270 from the day job, that is $7,020, still $3,000 short of $10,020.

The remaining gap exists because, once combined, much of the weekend income falls in the 30% bracket. A request for extra withholding can cover that.

Offsets can widen the gap rather than close it. The low income tax offset, worth up to $700, is calculated once on total income and shrinks as income rises. Withholding at two separate jobs can effectively allow for it twice.

It isn't only the threshold

Second-job workers can be caught by other items that only show up when income is combined.

HELP repayments are calculated on total repayment income. Someone whose combined income passes the minimum repayment threshold may owe a compulsory repayment that neither employer withheld, unless they asked for HELP withholding.

Higher earners without appropriate private hospital cover may also face the Medicare levy surcharge. Reports noted thresholds above $101,000 for singles and $202,000 for families, plus $1,500 for each dependent child after the first.

Gig and contract work adds another layer. Income paid without withholding, such as sole trader income, is not taxed at the source at all.

Changing your declaration

Anyone with more than one job can lodge a new tax file number declaration with an employer to stop claiming the threshold there. Employees can also ask an employer to withhold extra tax using a withholding variation, or to withhold for a HELP debt.

The ATO publishes guidance and calculators on tax withheld from pay, which can help estimate whether combined withholding is likely to cover the year's tax.

The new $1,000 standard deduction, which applies from 2026–27, does not double up either. ATO draft guidance says the cap applies to a person's total assessable labour income, so it is one deduction per person, not one per job.

Meanwhile, for people who lodged their own 2025–26 return and have a bill, the ATO said in an October 2026 release that payment is generally due on 21 November. Lodging late does not push back the payment date.

The ATO says it can discuss payment Options with people who cannot pay in full, and it offers support on 13 11 42.

What to watch

  • 21 November 2026: the date the ATO gives as the general payment date for self-preparers with a 2025–26 bill.
  • Now: second-job workers can review the declarations held by each employer before the rest of the 2026–27 year adds to any shortfall.
  • 1 July 2027: the lowest tax rate is legislated to fall from 15% to 14%, slightly shrinking per-job withholding but not fixing a double threshold.
  • 2027–28: the $250 Working Australians Tax Offset begins. It is non-refundable and, like the threshold, applies once per person.