Is a second job worth it?

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An Uber Case

Imagine an Australian trying to pay for their second mortgage. They’ve invested in property but with interest rates spiking, the only way they can hold onto the property is to earn additional income. Their “day job” starts early and ends at 3pm, which gives them time to drive as an Uber driver after that.

This Australian isn’t alone. The latest stats from the Australian Bureau of Statistics reveal that the number of workers holding multiple jobs has increased by 2.1% since December 2022 – in total, Australia has 947,300 people holding multiple jobs or 6.6% of the working population. 

The reason why people take on second jobs is varied. For some, it is to manage increasing costs, for others it is to start up a new venture but with the security of a regular income stream from their primary occupation. 

So, is it worth it? 

From a tax perspective, Australia has a progressive income tax system – the more you earn the more tax you pay, and access to social benefits tapers off. So, it’s important when looking at a second job to understand your overall position such as how much you are likely to earn, your costs of generating income, and what this income level will mean.  

The trap for many picking up a ‘gig economy’ second job is that they are often independent contractors. That is, you are responsible for managing your tax affairs.

All Uber drivers for example (like the case above), are required to hold an ABN and be registered for GST. There is a compliance cost to this and from a cashflow perspective, an eleventh of the fee collected needs to be remitted to the Tax Office once a quarter. It’s important to quarantine both the GST owing and income tax to ensure you have the cashflow to pay the tax when it is due.

The upside is you can claim the expenses related to your second job.  

Also, if you are taking on a second job, ensure that your tax-free threshold applies to your highest paying job from a PAYG withholding perspective. 

If you’re thinking of getting a second job to gain additional income, you should always speak to your advisor first to discuss all the tax implications involved. Contact our team at Aintree Group today for individual advice – we are always happy to help!