Do You Pay More Tax on a Second Job? Australia 2025-26

Is a second job taxed at a higher rate in Australia?

No. This is the single biggest myth in Australian tax. There is no separate “second job tax rate” and no penalty for having more than one job. Every dollar you earn — from your first job, your second job, a side hustle, interest or anything else — is added together into one taxable income and taxed at the same marginal rates everyone else pays.

For the 2025-26 income year, the resident rates are:

Notice there is no row that says “second job”. Your jobs are not taxed separately — they are combined.

So why does my second job feel so heavily taxed?

Because of the tax-free threshold. The first $18,200 you earn each year is tax-free, but you can only apply that tax-free amount to one employer. When you start a second job, you are asked whether you want to claim the tax-free threshold, and the correct answer is usually no for the second job.

That means your second employer withholds tax from the very first dollar, at a higher flat rate, while your main job gets the benefit of the tax-free threshold. More tax comes out of your second pay packet — but this is tax paid in advance, not a higher rate. It is simply trying to cover the tax on income that sits on top of your main job.

The tax-free threshold trap (and how to avoid a bill)

Here is where people get caught. When you fill in the tax declaration for each job, you choose whether to claim the tax-free threshold. The combinations matter:

• Claim it at one job only (correct): the right amount of tax is withheld overall, and you usually land close to even at tax time.
• Claim it at both jobs: both employers treat your first $18,200 as tax-free, so between them they withhold too little. The shortfall becomes a bill when you lodge.
• Claim it at neither job: too much tax is withheld, and you get the extra back as a refund — a forced saving, but your take-home pay is lower all year.

The rule of thumb: claim the tax-free threshold at your highest-paying job, and not at the others.

A worked example

Say your main job pays $55,000 and your second job pays $15,000, for a combined $70,000. Your tax is worked out on the full $70,000, not on each job separately:

• Tax on $70,000 (2025-26 rates) is about $11,788 before offsets.
• Your main job, claiming the threshold, withholds roughly the tax on $55,000.
• Your second job, not claiming the threshold, withholds at a flat rate on the full $15,000 — which feels harsh, but it is covering the tax on income stacked on top of your main wage.

At tax time, we add both income statements and all the tax withheld together. If the combined withholding was a little high, you get a refund; if a little low, you pay the gap. Either way, you are taxed once, on your total — never twice.

Don't forget: deductions count across both jobs

Work-related expenses for either job are deductible. If you drive between two jobs on the same day, that travel is often claimable (unlike your normal commute). Uniforms, tools, phone use and working-from-home hours for either role all reduce your taxable income. Keep records for both jobs, not just your main one.

What about HECS/HELP, Medicare and study loans?

Compulsory HECS/HELP repayments and the Medicare levy are calculated on your combined income. This is another common source of a tax-time bill: each employer only sees its own lower pay, so neither withholds enough for a study-loan repayment that is based on the total. If you have a study loan and two jobs, consider asking one employer to withhold a little extra.