PAYG amounts withheld from your payslips act as credits against your final tax liability for the 2025-26 income year, yet people with two or more jobs frequently find the total withheld does not equal the tax and Medicare levy actually payable. The mismatch occurs because withholding is calculated per employer without complete knowledge of combined income, and the tax-free threshold can be claimed on only one job under current law. Estimates from the 2025-26 Individual Tax Calculator provide a guide only; the ATO issues the final notice of assessment.

How PAYG withholding differs from the final assessment

PAYG withholding is an estimate of tax taken from each pay during the year. It appears on your income statements and is reported as a credit when you lodge. The final tax liability is calculated on your total taxable income for the full year after applying the resident tax rates, Medicare levy and any offsets. The ATO then subtracts the total PAYG withheld to determine whether you receive a refund or have an amount payable.

The 2025-26 resident tax rates are nil on income up to $18,200, 16 per cent from $18,201 to $45,000, 30 per cent from $45,001 to $135,000, 37 per cent from $135,001 to $190,000 and 45 per cent above $190,000. Medicare levy adds 2 per cent on most taxable income. These rates are current law for the year ending 30 June 2026.

Why multiple jobs commonly cause differences

When you have more than one job, each employer withholds tax based on the income paid by that employer alone. If you claim the tax-free threshold on more than one job, employers withhold less tax than your combined income requires. The ATO page on multiple jobs explains that you should normally claim the threshold on the job with the highest expected income and not claim it on others. Even when claimed correctly, the withholding tables do not account for the exact interaction of Medicare levy or other income across employers, so a difference often remains.

Other factors include changes in hours or pay rates during the year and any tax offsets you may be entitled to. The result is that the total withheld can be higher or lower than the final liability once all income is combined.

Worked example for 2025-26

Consider a resident individual with two jobs and no deductions or offsets. Job one pays $42,000 and the person claims the tax-free threshold. Job two pays $23,000 and the threshold is not claimed. Total taxable income is $65,000.

Tax is calculated as follows:

  • $0 to $18,200 at nil: $0
  • $18,201 to $45,000 ($26,800) at 16 per cent: $4,288
  • $45,001 to $65,000 ($20,000) at 30 per cent: $6,000

Income tax payable before Medicare levy is therefore $10,288. Medicare levy at 2 per cent on $65,000 adds $1,300, bringing the total liability to $11,588.

The income statements show total PAYG withheld of $10,800. After applying the credit, $788 remains payable. This example assumes the person is a resident for the full year, has no HELP debt, no private health insurance and claims no offsets. The main limitation is that real situations often include additional income, deductions or offsets that alter the final figure.

Input checklist for the 2025-26 Individual Tax Calculator

Enter every income statement amount exactly as shown, including gross income and the total tax withheld figure from each employer. Add any other assessable income and confirm you have not double-counted the tax-free threshold. Include any offsets or credits you expect to claim and note the Medicare levy status. The calculator applies the 2025-26 rates and Medicare levy to produce an estimate of refund or amount payable.

To get an estimate for your situation, try the 2025-26 Individual Tax Calculator.

Reviewing pre-filled data and common errors

When pre-filled data appears in your return or the calculator, compare each income statement total against the figures your employers reported to the ATO. Check that both jobs appear and that the withheld amounts match your payslips. Common errors include entering figures from the wrong income year, omitting a secondary job entirely or applying the tax-free threshold incorrectly across employers. Correcting these inputs produces a more reliable estimate before lodgement.

After you have reviewed the figures, the 2025-26 Individual Tax Calculator can be used again to test the effect of any adjustments.

Sources

https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/multiple-jobs-or-change-of-job https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2026/mytax-2026-estimate https://www.ato.gov.au/forms-and-instructions/tax-return-for-individuals-2026/income-questions-1-12-individual-tax-return-2026/total-tax-withheld-2026 https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents/