Super and tax when working multiple jobs

Whichever way you cut, more Australians are working multiple jobs than ever before.

In December, 970,700 people were working more than one job, data from the Australian Bureau of Statistics has revealed. Meanwhile the multiple job-holding rate, which compares the number of multiple job holders to all job holders, reached 6.7%.

These figures are as high as they've ever been, though as Bjorn Jarvis, the ABS's head of labour statistics explains, both have been relatively steady since the end of 2022.

"The multiple job-holding rate, which climbed to record highs during the pandemic, has also begun to stabilise, and has been between 6.6% and 6.7% over the past year. While it hasn't continued to increase, it is still around 0.8 percentage points higher than it was immediately before the pandemic."

Australians aged between 20-24 are most likely to be working more than one job (8.4%), according to the ABS, while women (7.5%) are more likely to be doing so than men (6%).

It won't always be the case, but working more than one job can make life more complicated. At least, when it comes to someone's finances.

So with that in mind, here are five things people who are already working multiple jobs, or are considering taking on another job, should know when it comes to tax and superannuation.

1. It's easy to be caught out by the tax-free threshold

Under the tax-free threshold, Australian resident taxpayers are able to pay no tax on the first $18,200 they earn. This is obviously a positive for most people, but it can become complicated when more than one job is involved.

"Some taxpayers with two or more jobs or other taxable income sources may be caught in an unintentional tax trap as a result of the tax-free threshold," says Mark Chapman, the director of tax communications at H&R Block.

"The problem is caused as the first job attracts the tax-free threshold while second and subsequent jobs can be undertaxed. This means that taxpayers can be left with a tax bill at the end of the financial year.

"Remember to only claim the tax-free threshold in relation to one job. If you claim it for both jobs, the underpayment of tax will be even greater."

Chapman says that the issue can be remedied by contacting your payroll department at one employer and having them deduct more tax each pay period to cover the shortfall. And if you have a tax agent, you can ask them to calculate the specific shortfall amount.

2. You're entitled to super from multiple employers

As recently as 2022 employers weren't required to pay the superannuation guarantee to employees who earned less than $450 each month, meaning some Australians working a second or third job would have simply missed out.

Peter Hogg, the head of advice, enhancements and experience at Aware Super, says that that's no longer the case now though.

"The great news is that recent changes mean that all employers need to pay you superannuation on your earnings, whether that's your main job or your second job.

"So you should be receiving a minimum of 11% superannuation guarantee from your employers - however many you might have."

From the start of the new financial year (July 1) the super guarantee rate will increase to 11.5% for most workers, and it will rise again in July 2025 to 12%.

3. Extra income can activate higher HECS-HELP repayments

Most Australians with a study or training loan will be well aware of the chunk of money garnished from their pay each fortnight or month.

That's because once you start earning a certain income, you'll be required to pay that debt off. The repayment rate currently starts at 1% for those earning upwards of $51,550 and steadily increases before maxing out at 10% for those earning $151,201 or more.

The potential issue for those working multiple jobs, explains Chapman, comes if your combined income pushes you into a repayment bracket which is higher than each employer is accounting for.

"If you are working more than one job, each employer will only withhold additional tax to cover your HECS-HELP debt based on the income that they pay you.

"If your combined income from multiple employers goes over one of the repayment thresholds, each of your employers is unlikely to have deducted enough and you will be liable to make an additional repayment towards your HECS-HELP debt when you lodge your tax return."

4. You may be better off sticking with one super fund

When someone starts a new job - whether it's their only job or a second or third one - their employer is required to give them the opportunity to choose their superannuation fund.

Of course, people can decide whether to stick with their existing fund or open a new account, but Hogg says that it's worth considering the cost involved with having more than one fund on the go.

"We generally suggest that having one fund makes a whole lot of sense. The key reasons behind that are having one set of fees and just being able to track that you're getting the right contributions.

"By having the one fund you can also make sure you do all the right things around that fund like nominating a beneficiary and investing your retirement savings in the right way."

Hogg does suggest that workers with existing super accounts from other jobs carefully weigh up their insurance situation before consolidating their super though.

"Having one fund makes a whole lot of sense, but there are implications you need to consider: having the right level of insurance and being in a fund that is low cost and performing well.

"It's important to make sure that you've got the right insurance in place. Some funds have different levels of insurance cover that you might need to think about, so before you go and close off the fund and go into one, make sure you do the right level investigation and seek help from your fund."

5. Travel between jobs is tax deductible

While workers generally can't claim the cost of commuting between work and home come tax time, the good news for those going from the workplace of one employer to another is that the travel costs are actually tax deductible.

"If you work as a teacher at a school during the day and as a waiter in a restaurant in the evening, providing you travel directly between the two, this travel will be deductible," Chapman explains.

"No deduction is allowed if you go home between the two jobs though as this is regarded as home to work travel and is not deductible."

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