Double Tax Hit
Hi Scott,
After losing my engineering job last year, I have been working multiple part-time positions and taking occasional work opportunities when they arise. I am in the same position I was at university, with one job taxed at the normal rate and all other ‘second jobs’ taxed at a much higher rate. What is the Government’s rationale for taxing additional income like this, and is there any way around it?
Max
Hi Max,
One day a bloke who didn’t want to take a second job, and instead wanted to spend his weekends drinking frothies at the 19th hole, gave this excuse to his wife:
“Love, why would I bother working a second job … I’ll lose it all in tax.”
And from that point on it became one of Australia’s great urban myths. So let’s clear it up:
Whether you work one, two or 20 jobs, the same tax scale applies. Most people nominate one job to claim the tax-free threshold on (in fact they can claim the threshold from more than one job if their total income is below $18,200). And it simply makes sense to claim the tax-free threshold from the highest-paying job. This is good news for you because you now work as you want, and you know that you won’t be penalised.
Do the work, earn the money, pay the tax.
Scott