How to Claim the Tax-Free Threshold on Your Current Job (Australia)
In Australia, thetax-free thresholdallows you to earn up to$18,200 per yearwithout paying any income tax. Claiming this threshold on your current job ensures that less tax is taken from your pay throughout the year.
This guide explains what the tax-free threshold is, how to claim it correctly, and what happens if you have more than one job.
1.What is the Tax-Free Threshold?
The tax-free threshold is the amount of income you can earn before you start paying income tax. As of 2025, its set at$18,200 per financial year(1 July 30 June).
If you claim it on your job, your employer will withholdless taxfrom your wages.
2.Who Can Claim It?
You can claim the tax-free threshold if you:
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Are anAustralian resident for tax purposes, and
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Have only one job, or
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Want to claim itfrom your main job
If you have multiple jobs, you can only claim the tax-free thresholdfrom one employerat a time (usually your highest paying job).
3.How to Claim the Tax-Free Threshold
a.When You Start a New Job
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Your employer will ask you to fill out aTax File Number (TFN) declaration form
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On that form, answerYesto the question:
Do you want to claim the tax-free threshold from this payer?
b.If You Already Have a Job
If you didnt claim the threshold earlier or want to change it:
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Ask your employer for anew TFN declaration form, or
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UseATOs online services through myGovto update your details
Your employer will then adjust how much tax they withhold from your future pays.
4.Can You Claim the Threshold on Multiple Jobs?
No. If you claim the tax-free threshold from more than one employer:
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You mayend up owing taxat the end of the year
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The ATO might ask you to pay the shortfall when you lodge your tax return
If you have a second job, donotclaim the threshold from that job.
5.What If You Earn Less Than $18,200?
If your total income for the year is below $18,200 and you didnt claim the threshold, you can still get arefundwhen you lodge your tax return.
6.Changing Jobs Mid-Year
If you change jobs during the year:
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Stop claimingthe threshold from the old job
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Start claimingit on the new one
Only one employer at a time should apply the tax-free threshold.
Final Thoughts
Claiming the tax-free threshold on your current job is simple and can save you from overpaying tax. Make sure you claim it from your main or only job, keep your details updated, and avoid claiming it from multiple employers at the same time.
