Why is so much tax taken from my second job?

Because you can only claim the tax-free threshold ($18,200) from one employer. Your second employer withholds tax from the first dollar, typically at higher rates. However, your total tax across both jobs is still based on the normal tax brackets: you'll likely get a refund for the over-withholding when you lodge your return.

What is a PAYG withholding variation?

If you have significant deductions (e.g., investment property losses, large work expenses), you can apply to the ATO for a PAYG withholding variation. This reduces the amount withheld each pay, giving you more take-home pay instead of a large refund. Apply via the ATO's online variation form.

Why was my bonus taxed at a higher rate?

Bonuses and overtime are withheld using method B (or the 'additional earnings' formula), which typically withholds at your marginal rate or higher. This is because the system assumes you might earn this much every pay period. You're not actually taxed more: you'll get the over-withholding back as a refund.

PAYG Withholding Calculator

Calculate the correct PAYG tax withholding for your salary or wages. Check if your employer is deducting the right amount of tax.

Updated October 2026Built and checked by MaverickHow it's calculated Report an error

Your numbers

Updates as you type

PAYG withholding

Withholding

$755

Per fortnightly

Net pay

$2,745

From $3,500 gross

Annual withholding

$19,640

21.6% effective

Annual net

$71,360

26 pays/year

Where each fortnightly pay goes

Net pay is what hits your bank. The rest is income tax, Medicare, and any HECS repayment.

Net pay78.4%

Income tax19.6%

Medicare2.0%

Match your payslip. If your actual withholding is meaningfully different (±$50/pay) from this, check (1) whether you've correctly claimed the tax-free threshold, (2) any salary sacrifice arrangement is set up correctly, and (3) you've declared HECS to your employer. Big over-withholding = the ATO sits on your money interest-free.

How it works

PAYG withholding is the tax your employer takes out of each pay and sends to the ATO. Too much and you wait for a refund; too little and you get a bill at tax time, which often happens with a second job or investment income. This checks whether what's coming out of your pay is about right.

1Enter your gross pay for a single pay period.
2Select how often you're paid (weekly, fortnightly, monthly).
3Indicate if you're claiming the tax-free threshold from this employer.
4Select whether you have a HECS/HELP or SFSS debt.
5Choose your Medicare levy status.
6See the expected withholding and compare to your actual payslip.

The figures today

Half of the Australians who paid tax in 2023–24 had a taxable income under about $71,000, and the top 10% earned more than about $157,000, from the ATO's statistics.

Incomes by job and postcode

Worked examples

Standard Fortnightly Worker

Sam earns $3,461 gross fortnightly ($90,000/year), claims the tax-free threshold, no HECS.

Expected PAYG withholding: approximately $674 per fortnight. Medicare levy: $69/fortnight. Total deducted: ~$743. Take-home: ~$2,718/fortnight. Annual tax: ~$19,320.

Second Job

Emma works a second job earning $500/week and correctly marks 'No' for the tax-free threshold.

Without the threshold, the ATO's Scale 1 withholds from the first dollar, including the Medicare levy: $90 a week on $500. Her main job already uses the tax-free threshold, so this job is taxed from the first dollar; whether she ends up with a refund or a bill depends on her combined income.

Questions people ask

Why is so much tax taken from my second job?: Because you can only claim the tax-free threshold ($18,200) from one employer. Your second employer withholds tax from the first dollar, typically at higher rates. However, your total tax across both jobs is still based on the normal tax brackets: you'll likely get a refund for the over-withholding when you lodge your return.
What is a PAYG withholding variation?: If you have significant deductions (e.g., investment property losses, large work expenses), you can apply to the ATO for a PAYG withholding variation. This reduces the amount withheld each pay, giving you more take-home pay instead of a large refund. Apply via the ATO's online variation form.
Why was my bonus taxed at a higher rate?: Bonuses and overtime are withheld using method B (or the 'additional earnings' formula), which typically withholds at your marginal rate or higher. This is because the system assumes you might earn this much every pay period. You're not actually taxed more: you'll get the over-withholding back as a refund.

The terms, in plain English

PAYG Withholding: Pay As You Go withholding: the system where employers deduct tax from employee pay and send it to the ATO. The amount is based on ATO withholding tables.
Tax-Free Threshold: The first $18,200 of annual income that is tax-free for Australian residents. You should only claim this from one employer.
Withholding Variation: An ATO-approved adjustment to the standard withholding amount. Allows for reduced withholding when you have large deductions or offsets.

Good to know

You can only claim the tax-free threshold from ONE employer. Second and subsequent jobs should be 'No': resulting in higher withholding.
If you don't claim the threshold, tax is withheld from the first dollar at higher rates.
PAYG withholding tables are updated annually by the ATO: rates most recently changed on 1 July 2026, when the second-round tax cut took the 16% bracket down to 15% (on top of the Stage 3 cuts from 1 July 2024).
If you have variable income (bonuses, overtime, commissions), your withholding may be higher per period because it's calculated as if you earn that amount every pay.

Tips

Compare your year-to-date withholding to the income tax calculator: if you're significantly over/under, talk to payroll.
If you have significant deductions or offsets, you can apply for a PAYG variation to reduce withholding and get more in your pay each period.
Second job? The ATO withholds at a higher rate because your first job already used the tax-free threshold. This often results in a refund.
You can request additional withholding from your employer if you have other income sources (investments, rental, freelance) to avoid a tax bill.

Common mistakes

Claiming the tax-free threshold from multiple employers: this results in underwithholding and a tax bill.
Panicking about high withholding on a bonus: bonuses are withheld as if you earn that amount every pay period, but you get the excess back as a refund.
Not realising overtime/penalty rates might put you in a higher withholding bracket for that pay period.
Ignoring PAYG on investment income: interest, dividends, and rental income don't have PAYG withheld automatically.

Compare the real products

The cheapest way to avoid the Medicare levy surchargeThe surcharge you would pay against the cheapest hospital policy that removes it, after the rebate.

Disclaimer: Estimates only. Interest rates, fees and policies change frequently. Always verify with lenders directly. General information, not personal financial advice.

PAYG Withholding Calculator

Your numbers

PAYG withholding

Where each fortnightly pay goes

How it works

The figures today

Worked examples

Standard Fortnightly Worker

Second Job

Questions people ask

The terms, in plain English

Official sources

Income Tax Calculator

Tax Refund Estimator

Medicare Levy Calculator

PAYG Withholding Calculator

Your numbers

PAYG withholding

Where each fortnightly pay goes

How it works

The figures today

Worked examples

Standard Fortnightly Worker

Second Job

Questions people ask

The terms, in plain English

Official sources

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Income Tax Calculator

Tax Refund Estimator

Medicare Levy Calculator