What is the tax-free threshold?
Understand what the tax-free threshold is and how to claim it as an Australian resident.
Summary
The tax-free threshold is the amount of income an Australian resident can earn each income year before income tax applies. Most Australian residents can claim the tax-free threshold from one payer.
What this means
If you are an Australian resident for tax purposes, the first portion of your income each year is not taxed. You choose whether to claim the threshold on the Tax File Number (TFN) declaration you give a payer such as an employer, government agency or other payer.
If you have more than one payer at the same time, you generally only claim the tax-free threshold from one — usually the payer that pays you the most. Foreign residents for tax purposes cannot claim the threshold and pay tax on every dollar of Australian income. Check the current threshold amount on the ATO website.
Typical actions
- Confirm your residency status for tax purposes.
- Claim the tax-free threshold on the TFN declaration for one payer only.
- If you have multiple jobs, generally do not claim the threshold from your second payer.
- Update your withholding declaration if your circumstances change during the year.
- Check the current threshold amount on the ATO website.
Official ATO sources
Last checked: 24 August 2026
Tax-free threshold
Explains what the tax-free threshold is and how to claim it.
Multiple jobs or change of job
Explains when to claim the tax-free threshold if you have multiple jobs or payers, or change jobs.
Related questions
- How is income tax calculated in Australia?
- Am I an Australian resident for tax purposes?
- What income do I need to declare?
- What is a tax return?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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