The first $18,200 you earn each year is tax-free if you're an Australian resident. Here's what that means for the tax taken from your pay, and which job to claim it from.
Key facts
- The tax-free threshold is the first $18,200 of income each year that most Australian residents pay no income tax on (2026–27).
- That's $350 a week, $700 a fortnight or $1,517 a month.
- With the low income tax offset, no income tax is payable on taxable income up to about $22,866 in 2026–27 (the Medicare levy has its own low-income threshold).
- You claim it on the TFN declaration you give your employer. With more than one job at the same time, you generally claim it from one payer only, usually the one that pays the most.
- Part-year residents get $13,464 plus up to $4,736 for the months they were resident; non-residents for the whole year can't claim it.
Tax withheld from weekly pay, with and without the threshold (2026–27)
| Weekly pay | Claiming the threshold | Not claiming it | Difference |
|---|---|---|---|
| $300 | $0 | $52 | $52 |
| $400 | $6 | $72 | $66 |
| $500 | $21 | $90 | $69 |
| $600 | $42 | $120 | $78 |
| $800 | $83 | $184 | $101 |
| $1,000 | $138 | $249 | $111 |
| $1,200 | $202 | $313 | $111 |
| $1,500 | $299 | $409 | $110 |
From the ATO's 2026–27 PAYG withholding formulas (scale 2 with the threshold, scale 1 without). Claiming it, nothing is withheld below $365 a week.
Which payer to claim it from
- One job: claim it.
- Two or more jobs at the same time: claim it from one, usually the highest paying; ask the others to withhold at the no tax-free threshold rate.
- Total income from every payer will be $18,200 or less: you can claim it from each payer.
- Changed jobs: claim it from your new employer.
Part-year residents
If you became (or stopped being) an Australian resident during the year, your threshold is $13,464 plus $4,736 × the months you were resident ÷ 12.
| Months resident | Tax-free threshold |
|---|---|
| 1 | $13,858.67 |
| 3 | $14,648.00 |
| 6 | $15,832.00 |
| 9 | $17,016.00 |
| 11 | $17,805.33 |
| 12 | $18,200.00 |
Common questions
What is the tax-free threshold in Australia?
$18,200 a year for Australian residents in 2026–27. You pay no income tax on income up to that amount.
Should I claim the tax-free threshold?
Yes from your main job, if you're an Australian resident. If you have a second job at the same time, don't claim it there unless your total income from all jobs will be $18,200 or less, or you'll likely get a tax bill.
What happens if I claim the tax-free threshold from two jobs?
Too little tax is withheld: each payer assumes the first $18,200 is tax-free. On $600 a week from a second job, about $78 a week less is withheld than without the threshold, which you'd owe at tax time.
Can I claim the tax-free threshold if I'm on a working holiday visa?
Working holiday makers are taxed under separate rates. Foreign residents for the whole year can't claim the tax-free threshold.
I changed jobs. Can I claim it again?
Yes. When your old employer stops paying you, you can claim the tax-free threshold from your new employer.
See also the second job tax calculator, the weekly tax table and tax brackets.
Sources: ATO how to claim the tax-free threshold and multiple jobs or change of job; withholding from the ATO's 2026–27 tax tables. Checked 22 October 2026.