You can change your tax-free threshold online by lodging a digital withholding declaration through ATO online services in your myGov account. The form replaces the old paper version, takes a few minutes, and tells the ATO which employer should apply the $18,200 threshold to your pay for the 2025–26 financial year.1Australian Taxation Office. Tax-Free Threshold for Newcomers to Australia Only Australian residents for tax purposes can claim it, and the change applies to future pay, not to what was already withheld earlier in the year.
What to Have Ready Before You Log In
Four things speed the form up:
- Your Tax File Number, a nine-digit number you can pull from a previous tax return or an old payment summary if you have not memorised it.2Australian Taxation Office. What Is a Tax File Number
- Your employer’s Australian Business Number, an eleven-digit number usually printed on your payslip. If it is not there, search the employer’s name on the free ABN Lookup tool at abr.business.gov.au.3ABN Lookup. ABN Lookup
- Your employer’s legal business name, which must match the name registered against the ABN. That is not always the trading name you see on the door.
- A myGov account linked to the ATO. If yours is not already linked, create the account and then answer two questions about your tax record to complete the link.4Australian Taxation Office. Create a myGov Account and Link It to the ATO
Lodging the Withholding Declaration Online
Sign in to myGov and open ATO online services. From the menu, go to Employment, then Employment details. The digital withholding declaration lives there.5Australian Taxation Office. Withholding Declaration Some fields pre-fill from your tax profile, so you are not re-entering everything from scratch.
The form uses checkboxes to either claim or stop claiming the tax-free threshold for a specific payer. Pick the option that matches your situation. If you have started a second job and want to keep claiming the threshold from your main employer only, you leave the main employer’s declaration alone and lodge a fresh one for the second employer with the threshold box unticked. If you want to move the threshold from an old employer to a new one, you lodge two declarations: one to stop claiming from the old payer, one to start claiming from the new payer.
The same form asks about study and training loan debts and whether you want to claim tax offsets. Fill those in on the same lodgment rather than coming back later.
A review screen appears before submission. Check the ABN, the legal employer name, and the threshold selection carefully, because a wrong ABN sends the update to the wrong payroll record. Tick the declaration box to electronically sign, and lodge. A confirmation screen returns a receipt number. Save it or take a screenshot. It is proof you notified the ATO and gives your payroll team something to search for if the change does not flow through.6Australian Taxation Office. Penalty Units
If You Cannot Use myGov
The paper form (NAT 3093) is still available from the ATO website, or you can request a copy by phoning 1300 720 092. Fill it in and give it to your employer directly.5Australian Taxation Office. Withholding Declaration The paper route goes to the employer rather than the ATO, so the employer is the one responsible for acting on it.
When the Change Reaches Your Pay
Once you lodge online, the ATO makes the update available to your employer through the digital payroll reporting channel.7Australian Taxation Office. Tax File Number and Withholding Declarations Payroll still has to process it on their end, so the adjustment usually shows up within one or two pay cycles.
If two pay cycles pass and nothing has changed, contact payroll with your lodgment receipt number. Occasionally payroll software does not pull the updated declaration automatically, and a manual prompt fixes it.
The change only affects future pay. Your employer will not recalculate withholding from earlier in the financial year. If you were over-withheld before the update, that money comes back as a refund when you lodge your tax return.
Which Employer Should Get the Threshold
If you have more than one job, you generally claim the tax-free threshold from only one payer, usually whichever pays you the most. Claiming it from two employers at once means neither withholds enough tax, and you will almost certainly owe money at tax time.8Australian Taxation Office. Multiple Jobs or Change of Job
There is one exception. If you are confident your total income across every job will stay at or below $18,200 for the year, you can claim the threshold from each payer. The moment total income looks likely to cross $18,200, lodge a new declaration to stop claiming it from one of them.8Australian Taxation Office. Multiple Jobs or Change of Job
Even when you correctly claim the threshold from your main employer only, the withholding on a second job may still fall short. The second employer uses the “no tax-free threshold” column of the tax tables, but does not know your combined income or true marginal rate. If your combined income pushes you into a higher bracket, ask the second employer to withhold extra, or lodge a PAYG withholding variation through ATO online services to adjust the amount.9Australian Taxation Office. PAYG Withholding Variation Application
A Note on Residency
Only Australian residents for tax purposes can claim the tax-free threshold. Residency for tax is decided by tests looking at where you live, your economic ties, and how long you stay in Australia. It is not the same as citizenship or visa status.10Australian Taxation Office. Living Overseas and Becoming a Foreign Tax-Resident Foreign residents get no threshold at all and are taxed from the first dollar.11Australian Taxation Office. Tax Rates – Foreign Resident If your residency status changes partway through the year, you get a reduced threshold: a base of $13,464 plus a pro-rated share of the remaining $4,736 based on months of residency.12Australian Taxation Office. myTax 2026 Part-Year Tax-Free Threshold
Do Not Skip the Study Loan Box
The same declaration asks whether you have a HELP (HECS), VET Student Loan, or other study and training support loan. This is not optional. Tick the box if the answer is yes.5Australian Taxation Office. Withholding Declaration Your employer then withholds extra to cover the compulsory repayment that starts once your total income crosses $67,000 for the 2025–26 year.13Australian Taxation Office. Compulsory Repayments
If you leave the box unticked when you should have marked it, your employer under-withholds all year and the compulsory repayment lands on top of any other tax owing when you lodge. It is one of the most common causes of surprise tax debts, so refresh this answer every time you submit a new declaration.
If You Get the Withholding Wrong
Claiming the threshold from two employers at once, or forgetting to flag a study loan, does not change the tax you actually owe. It only changes how much is collected during the year. The shortfall shows up at tax time. If you cannot pay by the due date, the ATO adds a General Interest Charge that compounds daily.14Australian Taxation Office. General Interest Charge (GIC) Rates
False or misleading statements on tax documents carry separate administrative penalties under the Taxation Administration Act 1953. The penalty unit value is $330, and penalties scale by whether the ATO considers the behaviour careless, reckless, or intentional.6Australian Taxation Office. Penalty Units An honest mistake corrected promptly is treated differently from deliberate under-reporting. Either way, the easier path is getting the declaration right the first time and lodging a fresh one whenever your circumstances change.