Tax-Free Threshold
The first $18,200 of annual income that is not subject to income tax for Australian residents.
The tax-free threshold is the amount of income you can earn each financial year without paying any income tax. For Australian residents, this threshold is $18,200. Income above this amount is taxed at the applicable marginal rates. The tax-free threshold is only available to Australian residents for tax purposes — foreign residents pay tax from the first dollar earned.
When you start a new job, your employer asks you to complete a TFN declaration where you indicate whether you want to claim the tax-free threshold. If you have multiple jobs, you should generally only claim the threshold from one employer (usually the one that pays you the most) to avoid under-withholding and a potential tax debt at the end of the year.
The $18,200 threshold is effectively built into the PAYG withholding tables your employer uses to calculate tax on each pay. It equates to $350 per week or $1,517 per month of tax-free earnings. For part-year residents, the threshold is pro-rated based on the number of months you were a resident during the financial year.