The question "Do you want to claim the tax-free threshold from this payer?" refers to a choice you make on your Tax File Number (TFN) declaration form when starting or changing a job in Australia. Claiming the tax-free threshold means you ask your employer to reduce the amount of tax withheld from your pay by exempting the first $18,200 of your annual income, so you pay less tax throughout the year. You should claim the tax-free threshold from this payer if:

• This is your main job (the job where you earn the most).
• You are an Australian resident for tax purposes.
• Your total income from all jobs is likely to exceed the threshold.

If you have more than one job, claim the threshold from only one employer (usually your highest-paying job) to avoid owing tax at year-end. If you do not claim it, your employer will withhold tax from the first dollar you earn, meaning more tax is taken out during the year but you might get a refund later. You make this claim by answering "Yes" to this question on your TFN declaration form and submitting it to your employer. This status remains until you change jobs or update the form. In short, if this is your primary job and you want to minimize tax withheld, answer "Yes" to claim the tax-free threshold from this payer.