What is the tax-free threshold
The tax-free threshold is the amount of income you can earn before you pay tax. Most Australian residents can claim tax-free threshold on the first $18,200 of the income they earn in the income year.
Claiming the tax-free threshold reduces the amount of tax withheld from your income.
The tax-free threshold is equivalent to earning:
- $350 a week
- $700 a fortnight
- $1,517 a month.
How to claim the tax-free threshold
Your income may be from one or more payers, such as an employer or government agency or work you do under an Australian business number.
If you're an Australian resident for tax purposes you can claim the tax-free threshold each income year.
You can choose to claim or not claim the tax-free threshold on the tax file number (TFN) declaration you give to your payer (including Centrelink).
If you choose to do so:
- you will not pay tax where your income is under $18,200
- your payer will withhold tax when you earn above $18,200.
Find out what to do if you have multiple jobs or change jobs during the income year.
If you are an Australian resident for part of the year
If you are an Australian resident for tax purposes during the income year, you will receive a part-year tax-free threshold.
The part-year tax-free threshold has 2 components:
- a flat amount of $13,464
- an additional amount up to $4,736 pro-rated – we work on the number of months you were in Australia during the income year, including the month you arrived.
If you're a non-resident for the full income year, you can't claim the tax-free threshold. This means you pay tax on every dollar of income you earn in Australia. Find out about the Tax-free threshold for newcomers to Australia.