Source
r/AusFinance•
phyarr

I accidentally claimed the tax-free threshold on two jobs and have just realised. What can I do to save myself a crazy tax bill next year?

Tax

Okay I know I cooked it, I should have read the forms closer etc. But it's happened now and any help would be greatly appreciated.

Since the start of this financial year, I've had two jobs - one permanent part time three days/week, the other a casual gig on the other two weekdays (so all up I essentially work full time hours).

I've just recently realised that I ticked the tax-free threshold box on both TFN forms. I've been earning decent money across the two gigs with ~34k income and ~5k tax withheld since the start of FY 23-24, according to the ATO site.

However, I'm set to finish up the casual gig at the end of December and reduce to two days/week at my part time job from 2024 as I'm doing a Masters next year. I will also be applying for Youth Allowance while I'm studying.

So from 2024, I will be making significantly less than I have been in 2023. Will this save me from a crazy tax bill from ticking both boxes or am I screwed? Is there a way I can work out the bill ahead of time so I can put some money aside?

Thanks for your help.

Posted Nov 29, 2023, 3:02 AM UTC

5585
MN8BVW2Z8BS5•

Resubmit the TFN declaration to the employer, this time not claimg the TFT

110
phyarrOP•

Does this work retroactively - if I resubmit to the casual job even though I'm finishing up there in a few weeks will it count all of my earnings as not claiming the TFT?

17
opm881•

Wont work retroactively but will for going forward. Honestly if you are finishing up in a few weeks, id just leave it be and put some extra into savings. Chances are you wont end up owing anything or very little because of the massive drop in earnings for the second half of the financial year, but as others have said use a calculator to estimate it.

81
phyarrOP•

Thanks for your help

7
Myjunkisonfire•

Honestly you’ll be fine, especially if you’re had a chunk of time not working this year. I always claim the tax free threshold and usually take a couple months off a year. Almost never have a tax bill. Works out in the wash.

5
Hantur•

Looking at your situation I would not bother since you are finishing up with one and part time in both just work out how much you have earnt so far, figure out how much tax you should have paid vs what payg was taken out, and that's the figure you will be paying.

5
m_is_for_michael•

No, but there's a different form you can fill in which will allow them to deduct extra tax at an amount you specify.

Do your calculations, figure out how much you're likely to owe, divide it by 13 (assuming you get paid fortnightly) and put that on the form.

Obviously do the other step of not claiming the threshold on both jobs also.

4
Anachronism59•

"Is there a way I can work out the bill ahead of time so I can put some money aside?"

Estimate your annual income. The tax tables are here, add 2% Medicare levy. Add HECS repayment if relevant.
https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents

Tally up what has been already deducted and estimate what will be deducted from your pay.

The difference will be your likely bill. You need to pay by late Nov '24 (if you do your own tax)

39
TheatrePanic•

Yep. paycalculator.com.au may help (though you'll need to get the period right).

YTD taxable income and tax paid should be listed on payslips to make it easy.

13
mccannisms•

I have two jobs and check my ATO at the beginning of the quarter to make sure my tax is still on track as my hours/pay for each job fluctuate and my estimated income is a bit harder to nail at this point and time.

First week of Oct I checked my gross total, threw it in the tax calculator and made sure the PAYG amount met the calculated amount. If it doesn’t, I’ll submit a request for extra PAYG to be deducted on future pays. It it’s over, well I guess the gov gets a little interest free loan from me 🤷‍♀️

3
nothxloser•

I did this 2 years ago and on my 80k odd a year income I think the bill was 7-8k.

I used an accountant to maximise my claims, reduce the damage and extend the time I had to accumulate the money and pay it back, and ended up owing 6k after all was said and done.

The delays worked out and they just took it out of my refund the next year, which happened to be 6k. Nothing gained, nothing lost.

19
ParentalAnalysis•

This doesn't sound right. 40% of 18k is 7.2k and if you earned 80k there's no way you were being taxed at that rate.

4
nothxloser•

I might have been on more, I was on nursing penalties. I'm just guesstimating it's been a few years now haha.

2
ParentalAnalysis•

You'd need to earn closer to 250k to be in the tax bracket that would take 7-8k out of that. I don't think nurses make quite that much!

2
nothxloser•

My bill was definitely that high I just checked it was $6344.38, I still have the receipt from it! I was on somewhere between 80-100k, definitely not more.

1
phyarrOP•

Good to know, thank you.

1
Glittering_Quarter25•

Stop claiming any tax free threshold to even it out!

12
nothxloser•

That's actually kinda funny. And might work given it's about halfway through the year. 😂

6
HighMagistrateGreef•

Take the first 18k from your second job, put 6k aside, in a separate bank account or something. That should prepare you for most of the bill shock.

8
phyarrOP•

6k you reckon, oh dear

3
Available_Laugh52•

I don’t know where he got $6k from

You can use simple tax calculators online.

As of now, you’ve made 34k and had 5k withheld.

If you made 68k this financial year, you would owe close to $12.5k in tax.

If they had withheld tax correctly, you should have had about $6.3k withheld, so you’re about $1300 short of where you should be, if it was done correctly.

The risk you have is you’re reducing your hours, and youth allowance is taxable income. If for example, you made $300 every week for the next 6 months, no tax would be withheld (because earning $300 a week is below the PAYG threshold for withholding), but you would still owe tax on those earnings. In this specific example, you would owe the $1300 as described above, plus an additional $1300 (17% of $300 per week, for 26 weeks)

The easiest path forward is going to be to ask your employer, or Centerlink to withhold additional tax. Your current tax bracket is 17%, so ask Centerlink to withhold 17% to cover the tax owed on youth allowance.

The $1300 as described above works out to be about $50 per week for the next 6 months. Ask for that to be withheld every pay check, OR, put that aside in a bank account yourself.

5
phyarrOP•

This is a great reply, thank you so much.

3
HighMagistrateGreef•

That's at an minimum.. not knowing how much you made on the second job. But let's assume you should have been taxed at a marginal tax rate (about 30%) and for the first 18k, were taxed nothing...

There will be other tax too, as I said, but if you were already getting taxed a bit on those dollars, the difference between it and the marginal rate will be smaller

But my point was, put money aside now.

1
Automatic-Fall5525•

Doubt it'll be this much difference at your income bracket. You will be owing a bit extra at the end of the year. As others have said, use an online calculator to estimate the difference and keep it in a savings account

1
neontiger8888•

I don’t think anyone has given the right info about varying your PAYG deductions.

Go into my gov —> ato —> vary payg deductions. There’s an online form you fill in where you put your total expected earnings for the year, as well as how you have already earned, employer contact info and your most recent pay amounts. The ato will contact you in about 28 days to confirm the info, then theyll work out what your total tax withholding should be on average to cover the total tax you will owe at the end of the financial year. They’ll then contact your employers and have them all tax you at that flat rate for the rest of the financial year,on every pay packet.

E.g. they might work out that to not owe any tax, nor have a refund owed you, you’d need to be taxed an average of 24% for the rest of the year - and then every pay will just be taxed at that rate.

My understanding is that this directive from the ato (they will send it to your employer payroll in writing) will override any current amounts they are taxing you at.

7
phyarrOP•

Thanks, will look into this.

1
AssistantTasty1566•

Just the type in your predicted income to end of financial year into an online calc and it will calculate the total tax due and return

3
Affectionate-Fuel-26•

https://paycalculator.com.au/

You can calculated your tax bill here.

Mate I wouldnt worry about anything at all. As a sole trader I pay zero tax and then cop an end of year tax bill for 12 months. ATO doesnt care if you claim the tax free threshold on two jobs. Just as long as you pay your tax owing.

So just dont spend it.

3
[deleted]•

[removed]

1
rapier999•

Don’t they ask you to do a quarterly PAYG with your BAS?

1
Affectionate-Fuel-26•

Only if your over $75,000 and registered for GST.

2
lilmisswho89•

Just do a new TFN form for each and don’t claim the tax free threshold. It’s about half way through the year so it’ll even out

2
spatchi14•

This isn’t a bad thing imo. Put the money in a HISA and earn interest then pay it back next year. Why should the ATO earn interest in your money!!

2
m1llie•

Calculate how much you owe and just BPay it to the ATO (you can get your BPay details from mygov). You can send them money at any time throughout the financial year to avoid a big bill when they process your return.

2
SeveredEyeball•

Just don’t spent all Your money. Duh. High interest account.

2
StrongPangolin3•

start saving up for the bill.

2
Other_Actuary_2559•

Go to an accountant to give you advice. Perhaps they can contact the ATO and change the allocation mid year

1
Nottheadviceyaafter•

Pointless calling ato on this, they won't change nothing just balance at end of financial year. Withholding form and tax Dec is a employer/employee issue. He could lodge a higher withholding form with his employer if needed at a higher rate

1
Tasty_Prior_8510•

Start paying double or triple tax

1
Top_Toe4694•

In my experience, if you are up front with them, it's all good.

It's when they catch you that they do not go easy

1
[deleted]•

[removed]

1
ozera202•

i did the same as u and just did my tax return saturday, 17k from dominos , 6.5k from my side physio job additional from my main job which i was paying tax on. wit the 2 side gigs equalling arould 23k i have to pay 7.5k tax now ffs .

1
notveryoriginaaal•

There’s some tabs to select on the Xero profile when loading new staff, there’s tax free threshold, hecs, other deductions and withhold additional tax. Maybe ask your employer to look into that further for you. Might make up for what you haven’t payed yet. I haven’t had to check it yet so not sure what it does.

1
Alternative_Sky1380•

You can link ATO to your mygov account and pay in instalments. Get it sorted sooner rather than later so you're not running up a debt.

1