Paying tax on multiple sources of income

Multiple employers and tax-free threshold

If you receive income from more than one job, you should only claim the tax-free threshold from one employer. A common mistake is to claim the tax-free threshold from multiple employers.

Any income you earn, whether from an employer, government agency or work you do under an Australian business number (ABN), counts towards your tax-free threshold.

If you are an Australian resident for tax purposes, you’re entitled to the tax-free threshold of $18,200. This means you can earn up to $18,200 each year without paying tax.

In some situations, your employer will not withhold tax from your income because they don't expect you to earn over $18,200 from what they pay you throughout the year.

If you have more than one employer in an income year, your combined income may be more than the tax-free threshold.

Claiming the tax-free threshold from multiple employers

You may not have had enough tax withheld throughout the year if:

• your total income is above $18,200 from all employers, and
• you have claimed the tax-free threshold from more than one employer.

This means you may receive a tax bill to pay the difference. This will be due as a lump sum payment at the end of the financial year.

How to avoid a possible tax bill

To avoid the possibility of having to pay tax at the end of the financial year, you should only claim the tax-free threshold from one employer. If you need to let an employer know that you would like to discontinue applying the tax-free threshold from your pay, you can advise them by completing a Withholding declaration form.

Study or training support loan with multiple employers

If you change or have multiple jobs during the financial year, you need to tell your employer about your study and training support loan.

You will have compulsory repayments if:

• you have a study loan when you lodge your tax return, and
• your repayment income is above the minimum repayment threshold.

We calculate this automatically when you lodge.

To help reduce the likelihood of an unexpected tax bill, make sure your employer is withholding additional amounts from your salary and wages to cover your compulsory repayment. If they're not, complete a Withholding declaration form to let them know to withhold these amounts.

Your study and training support loan repayment is based on:

• your taxable income (including income from all jobs), plus
• any total net investment loss
• total reportable fringe benefits amounts
• reportable super contributions
• exempt foreign employment income.

Your employer calculates your repayments based on their expectation of your income. If your income significantly differs from their expectations, your repayment rate may be higher and will be due as a lump sum payment at the end of tax time. This may be the case if you are working multiple jobs or have other income.

Making voluntary repayments

You can make voluntary repayments to reduce your loan amount at any time. However, you will still have a compulsory repayment or overseas levy to pay if:

• you still have a debt, and
• your repayment income is above the minimum repayment threshold.

Earning salary or wages and income as a sole trader or on online platforms

You can take steps to avoid an unexpected tax bill if you earn salary or wages (from an employer), and you also:

• run a business as a sole trader (self-employed), or
• provide services through an online platform.

How to prepay tax on business income

If you are an employee, your employer will withhold tax each payday and send it to us. If you are self-employed, you are responsible for the tax you owe on your self-employed income.

To avoid an unexpected tax bill, you can prepay tax on this income throughout the year using pay as you go (PAYG) instalments. If you don't use PAYG instalments, you will be required to pay the entire amount as a lump sum at tax time.

Benefits of prepaying tax

Taking steps to prepay tax throughout the year can help you smooth out your cashflow and avoid a large tax bill. You can prepay your tax through PAYG instalments.

Study or training support loan with employment and self-employment

You need to make compulsory repayments if:

• you have a study loan when you lodge your tax return, and
• your repayment income is above the minimum repayment threshold.

Repayment income is calculated based on:

• your taxable income (including all income from employment and from self-employment), plus
• any total net investment loss
• total reportable fringe benefits amount
• reportable super contributions
• exempt foreign employment income.

Any additional income you earn from self-employment activities will increase the amount of your compulsory payment at tax time. The amount your employer is withholding from your salary and wage income to pay compulsory repayments will not account for this.

If you have not made arrangements to prepay tax on your self-employed income:

• your repayment income may be higher
• the amount withheld from your salary and wages by your employer won't cover the additional compulsory repayment amount.

This will increase your compulsory repayment, and you will be required to pay a larger amount when your tax return is calculated.

Include study and training support loan on PAYGI

Your study and training support loan can be included when you organise to prepay your tax on your self-employment income through PAYG instalments. This will help you avoid a large tax bill when you lodge your tax return.

Medicare levy

The Medicare levy is paid in addition to the tax you pay on your taxable income. It is 2% of your taxable income.

We calculate your Medicare levy when you lodge your income tax return. The amount of tax your employer withholds from your salary or wages usually includes an amount to cover the Medicare levy.

However, if you have not made arrangements to prepay tax on your self-employment income:

• your taxable income may be higher
• the amount withheld for Medicare levy from your salary and wages by your employer won't cover the additional Medicare levy payable.

This means you will need to pay some of your Medicare levy as a lump sum when your tax return is calculated.

If you voluntarily enter PAYG instalments or you are required to pay PAYG instalments, the instalment amount will help reduce any additional Medicare levy you are liable to pay.

Earning income from investments

Investing in crypto assets

Transactions involving crypto assets are usually subject to the same tax rules as other assets.

The most common use of crypto is as an investment. If you receive earnings from your crypto assets from staking rewards, airdrops and DeFi arrangements (similar to bank interest), you need to declare this income, even if you still hold the crypto asset. 

When you dispose of your crypto assets, you need to convert your crypto into Australian dollars before calculating your capital gain or loss.

Capital Gains Tax (CGT) is the tax you pay on profits from disposing of assets like shares and crypto assets. If you meet certain conditions, a CGT discount may apply.

A capital gain or a capital loss from the disposal of a crypto asset needs to be included in your tax return. Taxpayers who do not keep good records or consider the tax implications of their crypto transactions could be unprepared for an unexpected bill when their tax return is processed.

How to work out and report CGT on crypto

Watch our video on How to work out and report CGT on crypto.

Other investments

You need to be aware of your tax obligations if you earn income or make a capital gain or loss through the sale of other investments such as:

• a rental property
• shares
• exchange traded funds (ETFs).

ETFs provide investors with a standard distribution statement (SDS) that details what needs to be declared on their tax return. When an investor disposes of units, the SDS will show the capital gains or losses made from the sale of the units which also need to be included in their tax return.

Managed funds also provide investors with a statement with details of what needs to be declared on their tax return.

You must show any income or credits you receive from any trust investments on your tax return. Your distribution advice or statement from the trust will show what you need to include on your tax return.

Authorised by the Australian Government, Canberra.