2 jobs and tax...

[Tinks]

Can someone please explain how having 2 jobs at the same time affects the tax you pay, both at the end of the financial year and weekly.

Thanks

[Muppity]

It used to be a rule that on your employment declaration you had to say if it was a second job and your employer then deducted tax at the top marginal rate. I don't know if this is actually the RULE still so to speak or just good practice.

You don't actually pay more tax if you have two jobs than you would if you earned more in jsut one job IYKWIM - ie if you had a job pay $50K or two jobs paying $25K each. The problem arises when you get to the end of the financial year and if both jobs have been just taking out tax as if you were only earning $25K then you would end up with a huge tax bill to repay to the tax office.

So, really it is up to you, you either pay more tax as you go along (note really more - just what you should be paying) or know that you will get a bill at the end of the year.

There are some pretty simple calculators on the ATO website so you can put in your total annual income (from both jobs) and then work out about how much tax you should be paying each week. And if you aren't paying enough you can request one employer to take more out of your pay packet each week.

Hope this helps.

[Tinks]

Thanks Muppity.

Is the tax rate for a 2nd job really 50%? A friend told me it was.

[Bumperstump Cummerbund]

I think the highest tax bracket is 48%, so not much different from what your friend said...

[Pandora]

No it should be.
The main thin is you can claim the tax free threshold for both. The second job may get taxed at the marginal rate which I think is abot 46% but that's because they don't know your total combined earnings yet, so you'd get back the tax you shouldn't have paid when you do your tax return