Second Job Tax Impact Calculator
Thinking of a second job? Calculate the significant tax impact to discover your true take-home pay from the extra work.
Quick Use Samples
Income Details
Tax Impact Analysis
With a combined gross income of $97,000, your total estimated tax and HECS-HELP repayments are $29,752. This leaves you with a final net income of $67,248. Your overall effective tax rate across both jobs is 30.7%. The chart visualizes how the tax is distributed across both jobs, showing that the second job is taxed at a much higher marginal rate.
Income Breakdown: Net vs. Tax & HECS
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What is a Second Job Tax Impact Calculator?
This calculator shows you the true after-tax reality of taking on a second job in Australia. Because you can only claim the tax-free threshold once, every dollar you earn from a second job is taxed at your highest marginal tax rate. This tool calculates the significant tax impact to reveal your real take-home pay from the extra work.
Behind the Formula
The calculator adds the income from your main job and your second job to determine your total taxable income and find your top marginal tax bracket. It then applies this tax rate to every dollar of your second job's income. The formula is: Second Job Gross Income - (Second Job Gross Income × Your Highest Marginal Tax Rate) = Second Job Net Income.
Expert Insights
- It is legally required that you do NOT claim the tax-free threshold from your second employer. You must tick the appropriate box on the TFN Declaration form. Failure to do so will result in a large tax debt when you lodge your return.
- Your total income determines your obligations for things like the Medicare Levy Surcharge and HECS-HELP repayments. Income from a second job can easily push you over a threshold, triggering these extra costs.
- For some people, the extra tax and potential loss of government benefits can mean their effective return from a second job is very low. It's crucial to calculate this impact to decide if the extra work is truly worth the time and effort.
Actionable Tips
- Use this calculator before you accept a second job to understand exactly how much you'll be taking home. This helps you set realistic expectations and financial goals.
- If the tax impact is very high, consider other ways to increase your income, such as seeking a promotion in your main job or developing skills that lead to a higher-paying career.
- If you are a sole trader in your second job (e.g., a freelancer), you are responsible for setting aside your own tax. Use the calculator's estimated tax rate as a guide for how much to put away from each payment.
Real-World Examples
The Retail Worker
Someone earning $60,000 from their main job (32.5% tax bracket) takes a second job earning $15,000. The calculator shows that they will pay $4,875 in tax on that income, for a take-home amount of only $10,125. Their effective tax rate on the second job is 32.5%.
Crossing a Tax Bracket
An individual earns $40,000 in their main job (19% tax bracket). They get a second job earning $10,000. The first $5,000 of this second income is taxed at 19%, but the next $5,000 pushes their total income over the $45,000 threshold and is taxed at 32.5%.
Triggering HECS-HELP Repayments
Someone earns $50,000, just below the HECS-HELP repayment threshold. They take a second job earning $5,000. Their total income of $55,000 now triggers compulsory repayments, further reducing the net benefit of their second job.
Glossary of Terms
Tax-Free Threshold
The first $18,200 of your annual income that is not taxed. You can and should only claim this from one employer.
Marginal Tax Rate
The rate of tax you pay on the last dollar you earn. All income from a second job is taxed at your highest marginal rate.
TFN Declaration Form
A form you give to your employer to tell them your Tax File Number and whether or not to claim the tax-free threshold from them.