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  • New to tax and super

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    If you are new to the tax and superannuation systems, you may be wondering about how they work and what you need to do.

    On this page:

    Why we have a tax system

    The Australian way of life – the services we all value – is reliant on everyone paying the right amount of tax. The Australian Taxation Office (ATO) collects taxes on behalf of the Australian Government. The tax we pay contributes to funding essential services provided for the community, such as:

    • healthcare
    • education
    • emergency services
    • transport infrastructure
    • the defence force
    • payments for welfare, disaster relief and pensions.

    Watch:

    This animation was developed from a story written by high school student Felicity Pollard – it provides a student’s perspective of the value of tax in the community:

    Media: Village and the Boy Named Tax
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiun8giu9fExternal Link (Duration: 00:02:57)

    Getting paid and paying tax

    When your employer pays your salary or wage they take out tax and send it to us. Your payslip will show how much tax you have paid. At the end of the financial year you will be able to see your total salary and tax taken out from your pay on your income statement, which is available by clicking through to the ATO in myGov.

    If you're an Australian resident for tax purposes, when we calculate how much tax you need to pay at the end of the year, the first $18,200 of your yearly income isn't taxed. This is called the tax-free threshold. You can claim the tax-free threshold when you complete your TFN declaration with your employer.

    You can generally only claim the tax-free threshold from one employer. If you have more than one employer you should claim the tax-free threshold from the employer that pays the highest salary or wage.

    Some employers deposit your pay into your bank account, whereas others will pay you cash. Either option is okay, so long as they take the right amount of tax from your pay and send it to us. They should also pay the right amount of super into your nominated super fund. Your payslips will show how much tax and super has been contributed. If your employer doesn’t do these things, you could be getting less pay and super than you should.

    See also:

    When you need to lodge a tax return

    Generally, if you had tax taken out of your pay during the year or earned over $18,200 during the financial year (1 July to 30 June), you need to lodge a tax return.

    If you’re lodging your own tax return it is due by 31 October.

    In your tax return we use information about your income and the amount of tax you have paid to work out if you need to pay extra tax or if you need to get money back (a tax refund).

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    How to lodge

    Lodge online with myTax

    Lodging with myTax is a quick, easy and safe way to lodge your tax return online. To use myTax, you first need to have a myGov account and link your account to the ATO. To make the process easier, we have a special linking code to help you with your proof of identity when linking to us from myGov.

    To obtain this unique linking code you will need to call us on 13 28 61. When you call, make sure you have your identification information ready, such as your tax file number (TFN), driver's licence or Medicare card. We recommend you link to us before tax time to ensure you receive all communications and there are no delays in lodging your tax return. Once linked, you can access myTax simply by clicking through to the ATO in myGov – click Prepare to get started.

    See also:

    Watch:

    This video shows how easy it is to lodge with myTax:

    Media: A quick demonstration of lodging with myTax
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubo71uumExternal Link (Duration: 02:36)

    We have a range of other short videosExternal Link to show you how to lodge online using myTax.

    Lodge through a registered tax agent

    A tax agent can prepare and lodge your tax return. Tax agents must be registered with the Tax Practitioners Board (TPB). You can find a tax agent or check whether a person is registered by visiting the TPB website. Registered tax agents are the only people allowed to charge a fee to prepare and lodge your tax return. If you're using a tax agent for the first time, you need to contact them and they need to include you on their lodgment program before 31 October. Tax agents have longer to lodge returns so they may do it later than 31 October, but you need to be included on their client list before then.

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    Information you need to lodge

    When you lodge online with myTax or use a tax agent, we make tax easier by filling out information like employment income and bank interest in your tax return. For most people, this will be ready by the end of July. By waiting for us to pre-fill your information, you’re more likely to get it right.

    We will pre-fill this information as we receive it, so you need to check the details are correct and add in anything that is missing.

    Make sure you include income from all sources (whether it is prefilled or not), including

    • amounts received from all your jobs
    • some government payments
    • investments
    • bank interest
    • some types of crowdfunding
    • regular sharing economy income, like ride sourcing or renting all or part of your residence.

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    Government payments

    Some Australian Government payments form part of the income that we use to work out whether you will receive a refund or you have extra tax to pay. These include:

    • the age pension
    • carer payments
    • Austudy
    • JobSeeker payment
    • Newstart
    • Youth Allowance.

    Some government payments are exempt from income tax but you still need to declare them in your tax return. This information is used to work out whether you are eligible to receive a range of government benefits and tax offsets.

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    Deductions

    If you spend money on things to do your job you may be able to deduct these expenses from your income on your tax return. These are called deductions and might include protective clothing or other equipment. Deductions can also include certain amounts given as gifts or donations. You must have spent the money yourself and not been reimbursed. You also need to keep records, such as receipts, for deductions you claim. We may ask you to show us these records and you need to keep them for at least five years.

    The myDeductions tool is a convenient way to keep your expense records in one place. To use this tool, download the ATO app to your smart device and select the myDeductions icon.

    The important thing to remember about deductions is that you apply them to reduce the amount of income you pay tax on. You don’t deduct them directly from your tax amount. If you are not required to pay tax you will not receive extra back for any deductions when you lodge your tax return.

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    What happens after you lodge

    When you lodge your tax return, we calculate the amount of tax you need to pay on your total income for the year (rather than just pay to pay) less any deductions you are eligible to claim. Once we’ve processed your return, we’ll send you a notice of assessment to your myGov inbox or to your tax agent. This will show if you will get a refund (because you’ve paid more than you needed to throughout the year), or if you need to pay more tax.

    Your tax return normally takes up to two weeks to process. Information you provide is matched with information we have received from a range of sources and where allowed by law, we share it with other government agencies such as Services Australia. You can track the progress of your return by clicking through to the ATO in myGov or if you use a tax agent, they can check the progress of your return through their software.

    If your assessed income tax on your notice of assessment is $100 or more you will also receive a Tax Receipt in your myGov account which will show how the tax you’ve paid has been allocated to the community.

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    What superannuation is

    Superannuation, or super, is money set aside during your working life for when you retire. For most people super begins when you start work and your employer starts paying a portion of your salary or wages into a super fund for you. Your employer might suggest a fund for you, but you can choose a different one. Your super will stay in your super fund until you retire. You can only have early access to it in very limited circumstances.

    Keeping track of your super

    If you look after your super now, you will have more money to enjoy later. It’s important that you know:

    • if you’re entitled to super and how much you are getting from your employer
    • what super accounts you have – try to have only one super account so you can save on fees
    • what insurance is provided for you
    • you can check and manage your super by clicking through to the ATO in myGov.

    See also:

    Protecting your information

    It's important to protect your personal information. You should remember:

    • Keep your TFN safe; only give it to your employer and your tax agent (if you use one) and don’t let anyone else use it – even if they are a friend.
    • Don’t share your myGov or other online passwords with anyone, not even your tax agent (if you use one) needs these.
    • Don't include your TFN, passwords or other sensitive information in emails.
    • To report a scam or if you aren’t sure if something is a scam phone us on 1800 008 540 or visit ato.gov.au/scams

    We’re here to help

    If you have questions, post in our online forum ATO Community or view our website for information on a range of topics.

    If you need additional help phone us on:

    • 13 28 61 for tax information
    • 13 10 20 for super information

    You may also be eligible for our free service called Tax Help, where volunteers can help you prepare and lodge your tax return.

    Aboriginal and Torres Strait Islander peoples can contact us on the ATO Indigenous helpline 13 10 30.

    If you prefer to speak to us in a language other than English, phone us using the Translating and Interpreting Service on 13 14 50.

    See also:

      Last modified: 13 Jul 2020QC 63023