The tax-free threshold: what it is and when to claim it

Updated 13 November 2026.

If you're an Australian resident for tax, the first $18,200 of your income each financial year is tax-free. When you start a job, the Tax file number declaration asks whether you want to claim this tax-free threshold from that employer.

What claiming it does to your pay

Claiming the threshold means your employer withholds less tax from each pay, because it assumes part of your income won't be taxed. On $1,000.00 a week in 2026–27:

Claim it from one employer

You only get one tax-free threshold, so you'd normally claim it from the employer who pays you the most and not from any others. If you claim it from two employers at once, too little tax is withheld overall and you may have a bill when you lodge your tax return.

If your total income from all jobs will be under $18,200 for the year, you can claim it from more than one employer.

Who can't claim it

Foreign residents for tax can't claim the tax-free threshold. Working holiday makers have their own tax rates.

See how it affects your pay with the pay calculator, or read about tax on a second job.