Am i an Idiot? Tax Question!?

Question

Hi Everyone :)

My Question is........

When my partner gave up her job because she was heavily pregnant, I was asked to take over to help the owner out & I thought that the little bit of extra money would come in handy.

Now in my full time job I earned $92 356 aus pa. This puts me in the 40c per $1 tax bracket.

Now my 2nd job was cleaning for a small motel earning $15 an hour usally doing no more than 8 hours a week! Now because I am claiming my Tax free $6000 free-threshold from my main job does that mean that my 2nd employer should be paying $6 per hour tax on my behalf leaving me with $9 per hour!

My partner lead me to believe that I could claim the $6000 free-threshold on both jobs and I have now found out that this is not the case!!!!!!

If it means that I have been working my guts out for $9 im gonna cry as $15 an hour was bad enough. I bet my employer has not been taking out enough tax and I will now get a bill!!!!

So much for hard work gets you ahead!

Answer 1

We're all subject to the same tax system - the rates are based on all the dollars you earn to put your entire income into a certain tax bracket level, not how hard you work to earn the dollars. You'll find out how much extra tax you'll have to pay on the second job's negligible wages after you do your 2008 tax return. If you claim some tax deductions to reduce your taxable income, saving yourself 40 odd cents on every dollar you claim, you'll probably end up not having to pay very much tax on the second job wages when it all balances out.

You'll probably also do alright out of the Family Tax Benefit Part B (based on your wife's lower income) and the Baby Bonus payment. I work very hard too but don't get those kinds of concessions. So you're getting some favours out of the system. And even though $15 an hour is much less than what you normally earn, at least the arrangement has secured your wife's ongoing future employment (if that's why you did it). Nothing to complain about, really :)

I feel sorry for people working their guts out in menial jobs all week for only $40,000 pa... and that's all they have to feed, transport and home their family with. It must be really hard for them these days.

Answer 2

The tax withheld should be more for your second job because you can only claim the tax free threshold for your main place of employment, but seeing as you havent earnt much it should be ok.  If you worked 8 hours at $15 an hour ($120) you should be taxed around $20 of it.  i have added a link to the tax calculator at the tax office for you.

Answer 3

You can only claim the tax free threshold on your full time job. You will be taxed half pay for your second job which will leave you $7.50 BUT you will get most of this back at tax time. This year you will need to pay a bit to the ATO so make sure you change the details of your second job asap.

Get a tax agent to do your tax this year as they will know everything that you will be able to claim as deductions.