Generating extra income through getting a second job, what the tax implications of this will be, and why it could be a great option if you’re really needing to increase what’s coming in.
Is it worth it?
A lot of people avoid the idea of getting a second job because they are under the impression that the additional tax they pay will make it not worthwhile.
The reality is that having a second job will effect your income in the exact same way as getting a pay-rise does.
You will pay more tax on the extra money you earn, but not at a higher rate, or a penalty rate.
In Australia our tax system works in brackets, so as our income increases we move into a higher tax bracket, but only on that portion of the income, not on our total income.
Increase your income
Getting a second job, can be an excellent solution to earn more income, particular if you want to increase your income for a shorter period of time.
Like maybe you want to commit to paying off your credit card debt within six months, or save up for a holiday.
A part-time job will likely be very flexible and allow you to work for awhile, and finish up when you no longer need the income, without causing too many problems.
In this instance, it might be better to look for work on a casual basis though, rather than part-time, as this will provide you with more flexibility.
You could also consider freelancing if you have the skills to be able to do this, this will provide you with even more flexibility, because you’ll get to control how much work you take on, when you complete the work, and who you want to work for.
That being said, you’ll have to be quite organised, because it’ll be your job to invoice your clients, chase up payment, and set enough aside to pay tax at the end of the financial year. You’ll also need to register for an ABN in order to do this.
So there’s a couple of options for you, if you’ve ever had a second job in order to earn some extra cash, I’d love to hear abut your experience in the comments section below.