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  • Why we have tax

    The Australian Taxation Office (ATO) collects taxes for the Australian Government. The taxes we all pay fund community services such as:

    • health care
    • education
    • emergency services
    • roads and train lines
    • the Australian Defence Force
    • welfare and disaster relief.

    Having the services we all value depends on everyone paying the right amount of tax.

    Watch: Village and the boy named Tax

    This animation was developed from a story by high school student Felicity Pollard.

    Media: Village and the boy named tax
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiun8giu9fExternal Link (Duration: 02:55)

    Starting work

    In this section

    Basis of your employment

    When you start working, you need to know if you are an employee, contractor or working for yourself. You may need to:

    Your income and paying tax

    If you have an employer

    When your employer pays your salary or wage, they take out tax and send it to us. Your payslipsExternal Link will show how much tax has been taken out.

    Some employers deposit your pay into your bank account, but 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. If you're eligible, your employer must also pay superannuation into a super fund you nominate. Your payslips will show how much tax and super your employer contributes. If your employer doesn’t do these things, you could be getting less pay and super than you should.

    When you lodge your tax return

    When you lodge your tax return at the end of the income year, we calculate how much tax should be paid on your income less the amount your employer has already sent to us. The income year runs 1 July to 30 June. At the end of the income year you will be able to see your total salary and tax taken out from your pay on your income statement. You can access your income statement through ATO online services in myGov.

    Tax-free threshold and tax rates

    If you're an Australian resident, the first $18,200 you earn is tax-free. This is known as the tax-free threshold. You can claim the tax-free threshold when you complete your TFN declaration with your employer. If you earn less than $18,200 for the entire income year you generally don't have to pay any tax.

    If your employer withholds any tax from your pay and your income is below the tax-free threshold these amounts can be refunded to you when you lodge your tax return.

    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.

    Getting online to make life easier

    You can manage your tax and super in one place by using our online services.

    Watch: How to create a myGov account and link to the ATO.

    Media: How to create a myGov account and link to the ATO
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfo8e4mExternal Link (Duration: 03:57)

    Create a myGov account and link to the ATO

    First, create a myGov account and link to the ATO.

    You can create your myGov account at my.gov.auExternal Link

    To link to the ATO:

    • go to the Services tab in your myGov account
    • select Australian Taxation Office
    • select Questions specific to you – you will need to answer 2 questions about information we already hold.

    If you can’t answer these questions, select Use a linking code and contact us to complete the linking process.

    Once you're set up, download the myGovID appExternal Link. You can connect myGovID to your myGov account for a simple, flexible and secure way to sign in.

    Tax returns

    Find out about how and when to lodge your tax return and the information you need.

    In this section

    Watch: Our interactive video can help you understand everything you need to know about the lodging your tax return:

     

    A transcript of this video is available.

    When you need to lodge a tax return

    Generally, when you have tax taken out of your pay during the year or earn over $18,200 during the income year, you need to lodge a tax return.

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

    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).

    If you work out that you don't need to lodge a tax return, you need to lodge a non-lodgment advice.

    How to lodge

    You choose how to prepare and lodge your tax return.

    Lodge online with myTax

    Lodging online with myTax is an easy, safe way to lodge your tax return for free. To use myTax, you first need to have a myGov account and link your account to the ATO. Once you link, you can simply use myTax by selecting your ATO member service in myGov – then select Prepare to start your tax return.

    Watch: A quick demonstration of lodging with myTax

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

    Lodge through a registered tax agent

    A tax agent registered with the Tax Practitioners Board (TPB) can prepare and lodge your tax return. You can find a tax agent or check if one is registered by visiting the TPB websiteExternal Link. Registered tax agents are the only people allowed to charge a fee to prepare and lodge your tax return.

    If you're going to use a tax agent, you need to contact them before 31 October so they can include you in their lodgment program. Tax agents have longer to lodge returns so they may do it later than 31 October, but you need to be on their client list before then.

    Information you need to lodge

    When you lodge online with myTax or use a tax agent, we pre-fill your tax return with information we already have. For example, employment income and bank interest. For most people, this will be ready by late July. Waiting for us to pre-fill your information can make doing your tax return easier and more accurate.

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

    Make sure you include income from all sources (whether it pre-fills or not), including:

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

    Government payments

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

    • carer payments (but not carers allowance)
    • Austudy
    • JobSeeker payment
    • Abstudy
    • Youth Allowance

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

    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 expenses you incur for items like protective clothing or other equipment. You can also claim a deduction for gifts or donations you make to Deductible Gift Recipients.

    If your employer reimburses you for the money you spent, you can't claim a deduction. 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 5 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 deductions when you lodge your tax return.

    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 less any deductions you are eligible to claim for the year. Once we’ve processed your return, we’ll send a notice of assessment to your myGov Inbox or your tax agent. This will show whether you will get a refund (because you’ve paid more tax than you needed to throughout the year), or you need to pay more tax.

    Your tax return normally takes up to 2 weeks (14 days) to process.

    Information you give is matched with information we have received from a range of sources. Where allowed by the law, we share the information with other government agencies such as Services Australia.

    You can check the progress of your return by accessing ATO online services through myGov. 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 get a tax receipt in your myGov Inbox. It will show how the tax you’ve paid has been allocated to the community.

    Superannuation

    Superannuation (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 super guarantee and a portion of your salary or wages into a super fund for you.

    Most people can choose the fund that their employer pays super into and it's important to keep track of your super. Your super will stay in your super fund until you retire. You can only access your super before retirement in very limited circumstances.

    Keeping track of your super

    If you look after (grow) 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
    • how to consolidate your super if you end up with more than one account
    • what insurance is included
    • you can check and manage your super by accessing ATO online services through your myGov account.

    Protect your information

    It's important to protect your personal information.

    Watch: Protect your personal information.

    Media: Protect your personal information
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfurqiwExternal Link (Duration: 01:34)

    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 think something is a scam, contact us or visit verify or report a scam.

    Help and support we provide

    We have a range of help and support available to help you.

    In this section

    Our website

    If you have questions or need help, check our website for information on a range of topics.

    Work Ready Course

    We have developed a free Work Ready CourseExternal Link that's available on our Tax, Super + You website. This course will help you to:

    • understand the meaning of tax and super, how they work and why they are important
    • develop the skills to become work-ready and successfully navigate Australia's tax and superannuation systems
    • understand the responsibilities of businesses in relation to tax and super.

    ATO Community

    Find answers to questions people have asked about tax and super on ATO Community. For information you can rely on, look for answers marked 'ATO certified response'.

    ATO Community logo

    The most common things people ask about on ATO Community, with certified answers, are:

     

    If you can't find what you're looking for, you can also ask your own question.

    Tax Help program

    At tax time you can get free help with your tax. Our Tax Help program is for people earning around $60,000 or less a year. If you need help completing your tax return, refund of franking credit, non-lodgment advice or amendment, our trained volunteers may be able to help you.

    Tax Help is available online, by phone or in person at one of the Tax Help centres located across Australia. The service runs from July to October each year.

      Last modified: 24 Jun 2022QC 63023