Tax-Free Threshold and Take-Home Pay
How the Australian tax-free threshold affects pay estimates and payroll withholding.
It affects withholding
The tax-free threshold tells payroll how to withhold tax across the year.
Multiple jobs need care
If you have more than one payer, claiming the threshold from more than one employer can cause problems at tax time.
Calculators use assumptions
A take-home pay calculator needs to know whether the threshold is being claimed to estimate pay accurately.
Common questions
Should I claim the tax-free threshold?
Many people claim it from their main employer, but the right answer depends on your circumstances.
Does it change final tax?
It mainly changes withholding through the year. Your final tax is reconciled through the tax return.