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

Calculator

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

Free to useNo data storedAI insightsUpdated: February 2026

PAYG (Pay As You Go) withholding is the tax your employer deducts from your pay and sends to the ATO on your behalf. Getting it right matters — too much withheld means a large refund (but less in your pocket all year), too little means a tax bill. If you have a second job, side income, or investment income, your regular PAYG might not cover everything. This calculator helps you verify your withholding is correct.

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Real-World Examples

Standard Fortnightly Worker

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

Expected PAYG withholding: approximately $697 per fortnight. Medicare levy: $69/fortnight. Total deducted: ~$766. Take-home: ~$2,695/fortnight. Annual tax: ~$19,922.

Second Job

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

Without the threshold, tax is withheld from dollar one. Expected withholding: approximately $160/week (32%). This seems high, but her main job already used the $18,200 threshold. She'll likely get a partial refund at tax time depending on total combined income.

Frequently Asked Questions

Glossary

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.

Related Tools

Income Tax Calculator

Calculate your total annual tax to compare against PAYG withholding.

Tax Refund Estimator

Estimate your tax refund based on withholding vs actual tax.

Medicare Levy Calculator

Understand the Medicare levy component of your withholding.

How to Use

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.

Key Information

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 changed from 1 July 2024 with the Stage 3 tax cuts.
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.

Pro 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.

Avoid These 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.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026