Tax is the money that is taken out of a person’s bank account in order to support Government-funded things e.g. improving roads, public health care or public education.
Most employees will have tax taken out of their pay automatically – this is known as “Pay as you go” (PAYG) tax. It doesn’t matter how old you are – even people under 18 will have tax automatically deducted from their payslip.
The financial year starts at 1 July and ends on 30 June the following year. After the end of the financial year on 1 July, you need to file a tax return. This will add up all the money that the government has withheld through PAYG, all the money you have been paid, and calculate your final tax balance. If you earned less than the tax-free threshold over the year, then you will get back all the money that was withheld as a tax refund.
The current tax-free threshold is $18,200, which means if you earn under that amount each year, you don’t have to pay any tax and you will be able to get back all the tax that was taken from your pay. You can search how much tax you will need to pay on the income you earn on the Australian Tax Office website here.
For more information on tax, or lodging your return, you can check out ASIC’s MoneySmart site here. MoneySmart provides information to help people manage their money including learning about credit, debt, tax, superannuation and other money matters.
All workers, and anyone on a Centrelink payment is require to have a Tax File Number (TFN). Your tax file number becomes important for lodging your tax return, and keeping track of your superannuation and income.
You can read more about tax file numbers here.
Fore more information or help, you can contact the Australian Taxation Office for support. You can find out their contact details here.
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