Tax free threshold

The tax-free threshold is the amount of money that Australian taxpayers can earn without paying tax. The first $18,200 of income you receive is entirely tax free. This amount equates to:

  • $350 per week

  • $700 per fortnight

  • $1517 per month

When you start work for a new employer, you will be required to complete a Tax File Number Declaration form. This form will help your employer to calculate how much tax to withhold from payments made to you. Within this form, you can advise your employer that you want to claim the tax-free threshold by answering “Yes” at Question 9: “Do you want to claim the tax-free threshold from this payer?” (Figure 1.4)

If you have more than one job and your combined income exceeds $18,200, you can only claim the tax-free threshold for one of those jobs (normally the higher paying one). If you claim for both jobs, not enough tax will be deducted, meaning you will have a tax debt at the end of the year when you lodge your tax return.

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