bubblegum_babe

Hi All,

At the minute I have a part time job while waiting for the paperwork so I can start my main job. For some extra cash I would like to keep my part time job but I am not sure how the tax man will hit me

My main job is approx $62,000 per year

My second job is approx $15,500 per year

Both of the above figures are BEFORE tax. Will I have to pay an higher rate of tax on the second job? i.e. 40%??

Thanks

Shenni

My understanding last time I had a job in Oz and paid wages for staff was yes you have to pay the higher tax bracket on the 2nd job but when its tax time you may have deductions that will lower your actual tax bill

Bermudashorts

Your tax is calculated overall, so the fact that you earned from two employers is irrelevant, in the end you will pay the same as someone earning $77,500 in one job.

On a practical level, they will not apply the personal allowance to the second job (so long as you tick the form to indicate it is a second job), but my understanding is that they would then tax it as if it is a single income of $15.5k. This of course would be wrong, you would be paying at too low a rate and would end up with a big bill at the end of the year, so you should provide sufficient information so that they can apply the correct tax rates.

Information here.

http://www.ato.gov.au/content/23070.htm

KJCherokee

Your first employer will deduct tax at the usual rate for an income of $62,000 which means you will pay $12,150 tax on this income. Your second employer will deduct 15% tax on the whole of the $15,500 (no tax-free allowance), paying $2,325 in tax: so the total tax deducted as PAYG will be $14,475.

At tax time you will declare a total income of $77,500 on which you will be charged a total of $16,800 in tax, so you will have a tax bill of $2,375: this is because the PAYG tax on the second job was deducted at 15% whereas your marginal tax rate is 30%.

Based on 2011-2012 tax rates, and excluding Medicare.