How to Claim the Tax-Free Threshold on Your Current Job (Australia)

In Australia, the tax-free threshold allows you to earn up to $18,200 per year without 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, it’s set at $18,200 per financial year (1 July – 30 June).

If you claim it on your job, your employer will withhold less tax from your wages.

2. Who Can Claim It?

You can claim the tax-free threshold if you:

• Are an Australian resident for tax purposes, and

• Have only one job, or

• Want to claim it from your main job

If you have multiple jobs, you can only claim the tax-free threshold from one employer at a time (usually your highest paying job).

3. How to Claim the Tax-Free Threshold

a. When You Start a New Job

• Your employer will ask you to fill out a Tax File Number (TFN) declaration form

• On that form, answer “Yes” to the question:
  “Do you want to claim the tax-free threshold from this payer?”

b. If You Already Have a Job

If you didn’t claim the threshold earlier or want to change it:

• Ask your employer for a new TFN declaration form, or

• Use ATO’s online services through myGov to 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:

• You may end up owing tax at the end of the year

• The ATO might ask you to pay the shortfall when you lodge your tax return

If you have a second job, do not claim 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 didn’t claim the threshold, you can still get a refund when you lodge your tax return.

6. Changing Jobs Mid-Year

If you change jobs during the year:

• Stop claiming the threshold from the old job

• Start claiming it 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.