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Getting a second job: is it worth it?

Reported by Allison Tait
Monday, March 17, 2008

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By Allison Tait, ninemsn Finance

With gloomy economy times upon us, the household budget may not be going as far as it was. Could a second job be the answer?

According to a US survey*, there can be several different reasons people take a second job. Some do it to help with a career change, gaining experience in a new field before they make the big leap.

Others do it because they really enjoy the second job. The overwhelming majority, however, are working a second job to either meet living expenses or because they need extra money for something specific, say, to fund an overseas holiday or get a house deposit together.

Chances are that if you've experienced a cash-flow problem recently, have a credit card debt you can jump over or simply want to try to get ahead, you've considered joining the ranks of those in multiple jobs. The question is, is it worth it?

Show me the money

The first thing you notice when you get the pay packet from your second job is that you may be paying a higher rate of tax. While this at first seems grossly unfair, given that you are a doubly hard-working Australian, it's actually just an accounting thing.

The fact is that you can only claim your tax-free threshold — the first $6000 of your annual income — from one employer. It makes sense to make the claim from the employer who pays you the most — your primary source of income — but this means that you will pay tax on every dollar you earn at your second job.

Do you need to let your second employer know that they are, well, second best? "You don't need to tell them it's a second job, just that you're not claiming the threshold," says Gary Williams, partner with Sydney Rosenfeld Kant & Co.

Gary suggests, however, that you do keep an eye on how much tax you are paying. "You need to check it yourself," he says. "The Australian Tax Office website has calculators you can use or contact your tax agent." Pay an insufficient amount of tax and you'll end up with a bill at the end of the financial year, which is probably not the aim of the exercise.

Career-limiting move?

Experts agree that before signing up for a second job, you should check your primary employer's policy on the matter. Technically, you don't need to tell them about a second job, says Sydney career advisor Katie Roberts (www.katieroberts.com.au). "You can do whatever you want in your private life. But there can be benefits to letting them know you're considering the move." Letting the boss know that you're thinking about moonlighting might be a wake-up call that a pay rise is necessary.

Alternatively, he or she may be able to offer you extra paid hours in your primary job, saving you a lot of stress and hassle.

Of course, there's risk involved in laying your cards on the table. "Knowing that you're working a second job might also make them think that you won't have energy to put into your current job," says Katie. "It might affect the way you've viewed at work."

As for choosing a second job, Katie suggests that you try to find something you enjoy. For some people this will mean looking for something similar to what they do day to day and perhaps picking up new skills along the way. Others will look for something completely different, to add new energy to their day. Whatever you choose, remember that doing something just because you have to will result in low job satisfaction and may have a big effect on your home life.

"Working huge hours every week will affect your personal life," says Katie. "You need to weigh up whether it's worth it. Perhaps a better solution might be to find another day job that pays better and stick with one job."

Which job?

According to the ABS, the July 2001 Multiple Jobholding Survey (most recent data), shows that second jobs were most likely to be in the retail trade (16 percent), property and business services (13 percent), health and community services (14 percent), accommodation, cafes and restaurants (11 percent) or agriculture, forestry and fishing industries (11 percent). Katie suggests looking for casual work, rather than permanent part-time, particularly if you're after a temporary way to earn extra cash. "Rates of pay tend to be higher," she says. Other things to bear in mind include:

  • The proximity of your second job to your first — the closer the better in terms of stress and travelling (though you can claim the expense of travel from your first job to your second as tax deductions).
  • If you're seriously thinking about a new career, this could be your chance to try out the new industry, so have a strategy in mind when you're job searching.
  • Remember that something will have to give to give you time to work — trying to fit in a hectic social life as well will probably take you to breaking point.
  • Finally, don't forget to make time for significant others — all the extra cash in the world won't make up for the fact that you are never available.

*US Department of Labor

01/10/2014 09:56Sydney, Australia. 1 October,2014
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