Two Jobs Tax Calculator (Australia)

How the two-employer withholding mismatch works

1. 1

   Claim the threshold once

   You nominate one employer, usually your higher-paying or main job, to apply the $18,200 tax-free threshold on your TFN declaration.

2. 2

   Second employer withholds without it

   Your other employer withholds tax on every dollar you earn there using the 'no tax-free threshold' column, which is a much higher rate from the first dollar.

3. 3

   ATO taxes your combined income

   At tax time, the ATO adds both incomes together and applies the real progressive tax scale to the full combined figure, not to each job separately.

4. 4

   Reconciliation happens at lodgment

   Your tax return compares what was actually withheld across both jobs against what you actually owe on the combined total, producing a refund or a bill.

The withholding mismatch formula

Mismatch = (Tax withheld on primary job + Tax withheld on secondary job) − Tax on (primary income + secondary income) combined

• •The primary job's withholding always includes the $18,200 tax-free threshold.
• •The secondary job's withholding uses the 'no tax-free threshold' schedule, taxing from the first dollar.
• •The ATO's actual assessment only ever applies one tax-free threshold to your combined annual income.
• •The Medicare levy and any HECS/HELP repayments are calculated separately and are not included in this estimate.

Worked example

Someone earning A$100,000 from a main job and A$40,000 from a second job, each taxed independently by their employer.

Primary job income (annual)

A$100,000

Secondary job income (annual)

A$40,000

Total combined income

A$140,000

True combined tax (on total income)

$35,938.00

Total tax withheld (both jobs)

$27,076.00

Estimated tax bill (underpaid)

$8,862.00

Based on these two incomes, the combined withholding across both employers differs from the true tax owed on A$140,000 by $8,862.00.

Australian resident income tax brackets (2025–26)

These are the marginal rates the ATO applies to your true combined annual income once both jobs are added together.

Source: Australian Taxation Office (ATO)

Who this applies to

Anyone working two or more jobs at once

If you have concurrent employment with more than one employer during the same period, this mismatch can affect you.

Employees who claimed the threshold at both jobs

The mismatch is worst if you mistakenly claimed the tax-free threshold at more than one employer.

Casual and part-time workers changing jobs

If you change the threshold claim mid-year without updating a withholding declaration, timing gaps can also cause a mismatch.

Not relevant if your second job is very low income

If your combined income stays under the $18,200 tax-free threshold, there is usually no shortfall to reconcile.

Frequently Asked Questions

Why did I owe tax even though both employers withheld PAYG?

Each employer only sees the income it pays you, so if you claimed the tax-free threshold at more than one job, or your combined income pushed you into a higher bracket, the total tax withheld can fall short of what the ATO calculates once your two incomes are added together at tax time.

Should I claim the tax-free threshold at my second job?

Generally no — the ATO recommends claiming the tax-free threshold only at the employer that pays you the most, and selecting 'no tax-free threshold' at any other job, so your combined withholding more closely matches your real annual tax liability.

Does this calculator include the Medicare levy?

No, this estimate covers income tax only under the resident tax scale; the 2% Medicare levy, any Medicare levy surcharge, and HECS/HELP compulsory repayments are calculated separately by the ATO and are not included in these figures.

Can I fix under-withholding during the year instead of waiting for tax time?

Yes — you can lodge a withholding declaration with either employer to adjust how much tax is taken out of your pay, which helps smooth out the difference before you lodge your annual tax return.

What if my second job pays very little?

If your total income across both jobs stays under the $18,200 tax-free threshold, there is typically little or no shortfall, since neither job's withholding needs to cover much tax in the first place.