Australian Tax / Tax Return Guide
Everything about Australian tax from TFN application to Tax Return refund.
Everything about Australian tax from TFN application to Tax Return refund.
A Tax File Number is a unique identifier used for all tax matters in Australia. Essential for employment, bank accounts, and Tax Returns. Without a TFN, the highest tax rate (45%) applies.
The Australian financial year (income year) runs July 1 to June 30. Self-lodgment through myTax is due by October 31; a registered tax agent can extend the deadline, but you must engage the agent before October 31. See the 'Deadlines' section below for details, including early lodgment when leaving Australia.
Free. Lodge online via MyGov. Suitable for simple income (salary only).
$100-$300. Recommended for complex income/deductions. Agent fees are deductible next year.
If your total work-related claims are $300 or less you can claim without receipts, but you must have actually spent the money and be able to show how you worked it out. Over $300, written evidence is required for the whole amount. Source: ATO — Deductions you can claim (checked 2026-07)
Keep receipts and records for 5 years. If your total work-related claims exceed $300, written evidence is required for the full amount and the ATO may ask for it.
The Australian income year runs from July 1 to June 30. Once the financial year ends, you must lodge your Tax Return within the deadlines below.
If you are leaving Australia permanently before the end of the income year (June 30) and will no longer earn Australian-sourced income (other than interest, dividends and royalties), you can lodge early using a paper tax return without waiting for the year to end. Early lodgment is not available through myTax, and processing normally takes 50 business days. (ATO, checked 2026-07)
Source: ATO — How to lodge your tax return · ATO — Lodge your tax return before leaving Australia (checked 2026-07)
Australian residents for tax purposes get a tax-free threshold — no tax on the first $18,200. Below are the ATO's resident income tax rates for FY2025-26 (July 1, 2025 to June 30, 2026).
| Taxable income | Tax on this income |
|---|---|
| $0 - $18,200 | Nil (tax-free threshold) |
| $18,201 - $45,000 | 16c for each $1 over $18,200 |
| $45,001 - $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 - $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
These rates do not include the Medicare levy of 2%. Foreign residents get no tax-free threshold and pay 30% on the first $135,000 — see the tax residency and non-resident tax guide under 'Related Guides' below. Note: under legislated tax cuts, the 16% rate drops to 15% from July 1, 2026 (FY2026-27) and to 14% from July 1, 2027 — the table above applies to income earned up to June 30, 2026, the year being lodged now. Source: ATO — Tax rates: Australian residents (FY2025-26, checked 2026-07)
Most resident taxpayers pay a Medicare levy of 2% of taxable income on top of income tax. Low-income earners pay less: for FY2025-26 (raised in the May 2026 Budget, backdated to July 1, 2025), singles with taxable income of $28,011 or less pay no levy, and a reduced levy applies between $28,011 and $35,013 (family threshold $47,238 combined, plus $4,338 per dependent child). The ATO calculates the reduction automatically when you lodge. People not entitled to Medicare benefits (including some temporary visa holders) can apply for an exemption with a Medicare Entitlement Statement.
The Medicare Levy Surcharge (MLS) is a separate, additional charge on top of the levy. For FY2025-26, if your MLS income exceeds $101,000 for singles ($202,000 for families) and you do not hold an appropriate level of private hospital cover, an extra 1% to 1.5% applies depending on your income tier.
Source: ATO — Medicare levy · ATO — Medicare levy surcharge income, thresholds and rates (checked 2026-07)
MyGov (my.gov.au) is the integrated portal for Australian government services.
Refunds are paid into the Australian bank account listed on your Tax Return. Online (myTax) lodgments are mostly processed within 2 weeks; paper returns can take up to 50 business days. Track progress in ATO online services. (ATO, checked 2026-07)
Tip: In early July, employer income reports may be incomplete and pre-fill data inaccurate. We recommend lodging from August onwards.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $45,000 | 15% |
| $45,001 - $135,000 | $6,750 + 30% (excess) |
| $135,001 - $190,000 | $33,750 + 37% (excess) |
| $190,001+ | $54,100 + 45% (excess) |
Without a TFN, the highest rate of 45% applies to employment and bank interest income.
If working under an ABN, employers don't withhold tax. You must lodge quarterly BAS and pay tax yourself.
Official Australian Taxation Office
Government services portal (myTax access)
TFN online application for new arrivals
Resident income tax rate table (FY2025-26)
WHV holder tax rates
Medicare levy 2%, reductions and exemptions
Early lodgment before leaving Australia
Tax calculator (estimate refund/amount owed)
Once you have a TFN and have lodged your first return through myTax, the details are what decide whether you get a refund or a tax bill. This guide covers pre-lodgment preparation and timing, how deductions are calculated and substantiated, platform, investment and crypto income, how rates and offsets actually work, dealing with the ATO after you lodge, and the scenarios unique to migrants from your first year in Australia through to departure. Rates and rules can change with the financial year, your visa type and your residency status, so always confirm the final details on the official ATO website (ato.gov.au).
Paper payment summaries (group certificates) have been abolished. Your annual salary and withholding, reported by your employer through Single Touch Payroll (STP), now appears under Employment → Income statements in the ATO service linked to your myGov account. Employers must finalise this data by 14 July each year, at which point the status changes to 'Tax ready'. If you lodge while it still says 'Not tax ready', the figures may change during finalisation and force you to amend your return, so it is safest to wait until every employer's income statement shows Tax ready. If it still is not finalised past mid-July, contact your company's payroll team first.
myTax pre-fill data does not all arrive at once. Salary data typically lands in mid-July, bank interest, private health insurance (PHI) and Centrelink payment details in late July, and dividends and managed fund distributions often not until August or later. If you rush to lodge in early July, missing income can later trigger an amended assessment plus interest through ATO data matching, so unless you are in a hurry, lodging from August onwards is safer. Income not yet showing in pre-fill is still income you must report — the responsibility to lodge a complete return always sits with you.
The tax-free threshold (the first 18,200 dollars of annual income tax-free) can only be claimed with one employer. Claim it with two or more at the same time and each job under-withholds, leaving you with a hefty tax bill after lodgment — a classic trap for migrants juggling several casual jobs. The rule of thumb is to claim the threshold only at your highest-paying job and tick 'no' on the TFN declaration for the second job. If you changed jobs during the year, check before lodging that every former employer's income statement is showing with the ATO, and enter any missing ones manually from your final payslip.
Linking the ATO in myGov requires answering two questions based on records the ATO already holds — bank interest, salary, a super account, a past NOA and so on. Newly arrived migrants often have no such records and fail the online linking, in which case you can call the ATO personal enquiries line on 13 28 61, verify your identity and receive a linking code. The code expires quickly, so enter it on the myGov screen while still on the call to finish linking. Your TFN, name and date of birth must exactly match ATO records, so have your TFN notice and passport in hand when you call.
The myDeductions feature in the official ATO app lets you record receipt photos, work-related car trips, and side or other income as they happen throughout the year. At tax time you can upload the whole record into myTax in one go, which structurally prevents lost receipts and missed deductions — and spares you the July ritual of digging through a year of emails and paper receipts. Photographed digital copies count as valid substantiation, which also solves the problem of thermal-paper receipts fading. Note that the app data is stored on your device, so export a backup before switching phones.
Temporary visa holders who are not eligible for Medicare (students and workers from countries not covered by a Reciprocal Health Care Agreement, RHCA) can claim a full exemption from the Medicare levy, which is 2% of taxable income. The process is to apply to Services Australia for a Medicare Entitlement Statement (MES) confirming you are not entitled, then enter your exempt days in the Medicare levy exemption section of your tax return. The MES takes several weeks to process, so apply well before the July lodgment season; you do not attach the statement to your return, but you must keep it as evidence for five years. If you qualify but do not claim, you simply pay the 2% — on a 50,000 dollar income, that is 1,000 dollars on the line.
The fixed rate method for working-from-home deductions rose to 70 cents per hour from the 2024-25 financial year and covers electricity, gas, internet, mobile phone and stationery costs in one bundle. The key condition is a contemporaneous record of your actual hours worked from home for the whole year (timesheets, a work diary or a spreadsheet) — estimates like 'I worked two days a week so roughly this many hours' are not accepted. Claiming the fixed rate and then separately claiming internet or phone bills is double dipping and a classic audit flag. If you have a dedicated home office and your real costs are high, the actual cost method may work out better, so calculate both and compare.
The cents per kilometre method for work-related car deductions is 88 cents per km for the 2025-26 financial year, capped at 5,000 km per car per year (a maximum of 4,400 dollars). No logbook is required, but the ATO can ask how you worked out your kilometres (a work diary, route calculations), so you must be able to explain your figure. Ordinary commuting between home and work is generally not deductible — only trips like travel between workplaces, work errands, or carrying bulky equipment qualify. If your work driving goes well beyond 5,000 km a year, you reach the tipping point where keeping a 12-week logbook and claiming your actual work-use percentage under the logbook method becomes the better deal.
The rule that lets you claim up to 300 dollars of work-related deductions without receipts comes with a condition: you must actually have spent the money and be able to explain how you calculated it. Padding your return with a flat 300 dollars as if it were free money is one of the audit flags the ATO calls out every year. Separately, laundry costs for registered uniforms and protective clothing can be claimed up to 150 dollars without receipts, using a reasonable basis of calculation. Also remember that the moment your total deductions exceed 300 dollars, you need substantiation for the entire amount — not just the excess.
Self-education expenses are only deductible for courses directly connected to your current income-earning activity. A nurse taking a specialist nursing course can claim it, but a chef taking a coding bootcamp to switch into IT, or a general English course for settling into Australia, cannot be claimed. The old rule reducing the first 250 dollars was abolished from 1 July 2022, so every dollar is now deductible from the first. Beyond course fees, you can include textbooks, stationery, depreciation on study devices and related travel — but not any portion your employer paid or reimbursed.
Platforms like Uber, DoorDash, Airbnb and Airtasker must report each user's income to the ATO under the Sharing Economy Reporting Regime. It has applied to ride-sharing and short-stay accommodation since July 2023 and to other platforms since July 2024, so even if it does not show in your pre-fill, assume the ATO already has the data — unreported income gets caught through data matching. Delivery and ride-share income is reported as ABN-based business income, not wages, and you can deduct related costs such as the work-use share of your car and phone. One easily missed point: ride-share drivers must register for GST before their first trip, regardless of how much they earn.
Bank interest must be declared in full, even just a few dollars — banks report it to the ATO against your TFN, so omissions always surface. Australian share dividends work by grossing up the company tax already paid as franking credits. For example, a fully franked dividend of 700 dollars comes with 300 dollars of franking credits: you declare 1,000 dollars as income, then subtract the 300 dollars directly from your tax — and if your own rate is low, you may even get a refund. Interest on accounts where you never registered a TFN is withheld at 47%, but it is fully credited back through your tax return.
Crypto triggers a CGT (capital gains tax) event not only when you sell for cash, but also when you swap one coin for another, pay for goods or services, or transfer it to someone else — each at the market value at that moment. 'I never cashed out, so no tax' is a classic misconception: the ATO runs data-matching programs with domestic and overseas exchanges, and unreported gains lead to backdated amendments plus interest. Your records of each coin's cost base and acquisition date are the foundation of the tax calculation, so download your transaction history regularly and store it separately in case an exchange shuts down or freezes your account. If you made a loss, record it as a capital loss — you can offset it against capital gains in future years.
Australian tax residents who hold an asset (shares, crypto, property and so on) for more than 12 months only include 50% of the gain in their taxable income when they sell. On a 60,000 dollar gain, the discount means only 30,000 dollars is added to your income — a big difference. The relevant date is the contract date of the purchase and sale, not the settlement date, so a single day can decide whether the discount applies — always check your holding period before selling. Temporary residents can be exempt from CGT on assets other than taxable Australian property such as real estate, so if that might be you, read the guide covering residency and double taxation as well.
The resident rates for the 2025-26 financial year — the return you lodge this season (July to October 2026) — are 0% on taxable income up to 18,200 dollars, 16% on 18,201 to 45,000 dollars, 30% on 45,001 to 135,000 dollars, 37% on 135,001 to 190,000 dollars, and 45% above 190,000 dollars. It is a marginal rate system: crossing a bracket only taxes the amount above the line at the higher rate, not your whole income. From 1 July 2026 the 16% rate drops to 15% (saving up to 268 dollars a year) and drops again to 14% in July 2027 — this is already legislated, but note it does not apply to the 2025-26 income you are lodging now. Working holiday makers (WHM) are on a separate rate schedule — see the working holiday tax section above.
A deduction reduces your taxable income, so its value equals the deduction multiplied by your marginal rate — someone in the 30% bracket who claims 100 dollars saves 30 dollars. An offset, by contrast, comes straight off the tax itself: a 100 dollar offset is a full 100 dollars saved. The best-known one, LITO (the Low Income Tax Offset), is worth up to 700 dollars for taxable incomes up to 37,500 dollars, phasing out completely at 66,667 dollars — and the ATO calculates it automatically with no claim needed. Offsets can only reduce your tax to zero; any excess is not paid out as cash (with a few refundable exceptions such as franking credits).
On top of the rate scale, 2% of your taxable income is added as the Medicare levy. On a taxable income of 60,000 dollars that is an extra 1,200 dollars beyond income tax — it is roughly built into the payroll withholding tables, but the final reconciliation happens in your tax return. There are reduction and exemption thresholds for low incomes, so below a certain level the levy shrinks or disappears entirely, and myTax works out your eligibility automatically. Temporary visa holders not eligible for Medicare can claim the full exemption following the MES process described in the group above.
The Medicare Levy Surcharge (MLS) charges an extra 1 to 1.5% of income when earners above 101,000 dollars for singles or 202,000 dollars for families (2025-26 figures) do not hold private hospital cover (rising to 105,000 and 210,000 dollars from 2026-27). The test is not just taxable income but income for MLS purposes, which adds fringe benefits and more — so if your salary sits near the threshold, you may well be over it. If you are above the line, it is worth comparing the premium on a basic hospital cover policy against your MLS liability: taking out insurance can actually be cheaper. Be careful — extras-only policies covering dental or optical do not exempt you from the MLS.
Once your return is processed, the NOA (Notice of Assessment) arrives in your myGov inbox. It shows on a single page exactly how your tax was worked out: taxable income → tax on that income → additions like the Medicare levy → credits such as withholding and offsets → your final refund or amount payable. The NOA serves as proof of income for home loan and rental applications and as an identity document when re-linking myGov to the ATO the following year, so download and keep the PDF. If the NOA differs from your expected refund, the ATO has adjusted your return against pre-fill data — compare the details, and if you disagree, consider an amendment or an objection.
Before paying out your refund, the ATO automatically offsets it against any existing tax debts, Centrelink overpayments and child support liabilities, and sends only the balance. If your refund is smaller than expected, check the offset details that arrive with your NOA first. Delays can be caused by having no refund bank account registered, identity verification holds, or being selected for manual review — online returns are usually processed within 2 weeks, but a review can push it past 30 days. You can track the processing stage under Progress of return in ATO online services, which is quicker than calling.
If you spot an error after lodging, individuals can amend their return for free through myTax within 2 years of the NOA issue date. Voluntarily correcting omitted income before the ATO finds it sharply reduces or removes penalties — so if you remember interest or platform income you left out, fix it straight away rather than putting it off. If the amendment increases your tax, interest may be calculated from the original due date; if it increases your refund, you get the difference back. If more than 2 years have passed, or you disagree with the ATO's decision itself, the right path is an objection, not an amendment.
If you cannot pay a tax debt in one go, you can set up a payment plan through ATO online services, and individual debts below a certain amount can be arranged online without a phone call. But overdue tax accrues GIC (General Interest Charge) at around 11% per year, compounding daily — and from 1 July 2025 GIC is no longer tax deductible, making the cost of ignoring it much higher. It is often more expensive than a bank loan, so compare interest rates with your other debts and consider whether paying the tax debt first makes sense. GIC keeps accruing even during a payment plan, and missing an instalment can cancel the plan and move you into enforced collection.
In the year you arrive mid-year and become a tax resident, you get a pro-rated amount rather than the full 18,200 dollar tax-free threshold. The formula is 13,464 dollars plus (4,736 dollars × months of residency ÷ 12) — arriving in April, for example, gives roughly 14,648 dollars based on the 3 months from April to June. myTax calculates this automatically once you enter your residency start date and months, so you do not need to do the sums yourself. But be aware that payroll withholding assumes the full annual threshold, so your first return can produce an unexpected amount payable. The pro-rating only applies in the year you arrive and the year you permanently depart.
Even when your income is below the threshold and you have no obligation to lodge that year, simply ignoring it leaves the year flagged as un-lodged in ATO systems. Submitting a non-lodgment advice through myTax takes just minutes and marks the year as not requiring a return. Left unattended, it can lead to ATO reminder letters or become an obstacle in home loan applications and anything else requiring a clean tax history. International students with almost no income in their first year miss this constantly — so once 30 June passes each year, always do one of the two: lodge a return or submit a non-lodgment advice.
Following the High Court's 2021 Addy decision, working holiday makers who are tax residents and citizens of one of the 8 countries whose tax treaties contain a non-discrimination article — Chile, Finland, Germany, Israel, Japan, Norway, Turkey and the United Kingdom — can be taxed at ordinary resident rates including the tax-free threshold, instead of the 15% backpacker rate. For lower-income working holiday makers this means a substantial tax saving, and citizens of those countries taxed at 15% in past years may be able to amend and claim refunds. Korean, Chinese and Vietnamese citizens are not covered, as their treaties have no non-discrimination article — the WHM rates apply regardless of residency. The pivotal question is whether you are actually a tax resident (settling and living in one place, for instance), so check the ATO's residency tests first.
The 15% WHM rate applies only to income earned while you hold a 417 or 462 visa. If you switch to a student or work visa during the year, income earned after the switch is taxed at ordinary rates (including the tax-free threshold if you are a resident). When your visa changes, tell your employer so they move your withholding schedule from the WHM table to the standard one — otherwise later pays will be over- or under-withheld. Where both periods fall in the same financial year, your return treats the income in separate segments, so keep accurate records of your visa change date and the income either side of it.
Apply online via ATO website. Arrives by post in ~28 days. Without TFN, 45% tax rate applies.
July 1 to June 30. Tax Returns due July 1 - October 31.
Flat 15% on income up to $45,000. Standard non-resident rates apply above that.
Depends on income, tax paid, and deductions claimed.
Select 'Link a service', choose ATO, verify with TFN and bank details.
Work assets costing more than 300 dollars — laptops, phones and the like — are not written off in the year of purchase but claimed over their effective life as decline in value, and only for the work-use percentage. For example, a 2,000 dollar laptop used 60% for work lets you claim only 60% of each year's depreciation. By contrast, work items costing 300 dollars or less (tools, calculators, bags and so on) can be deducted in full immediately in the year of purchase — remember where that line sits. myTax has a built-in depreciation calculator: enter the purchase date, amount and work-use percentage and it does the rest.
Donations of 2 dollars or more are only deductible if the recipient organisation is registered as a DGR (Deductible Gift Recipient). Anyone can check an organisation's DGR status for free on ABN Lookup (abr.business.gov.au) by name or ABN. A common misconception: crowdfunding for individuals such as GoFundMe, fundraising event tickets, raffle entries and charity chocolate purchases — anything where you receive something in return — is mostly not deductible. To claim, keep your receipts and only include amounts given as pure donations with nothing received in return.
Income from market stalls, handmade goods or online content is tax-free if it is genuinely a hobby, but fully assessable if it counts as a business. The ATO's indicators are repetition and regularity, an intention to make a profit, businesslike organisation (stock management, advertising, a separate account and so on), and the scale of the activity. Selling an unwanted item once in a while is a hobby; making things specifically to sell, listing them regularly and pricing them off your costs tips you towards a business. Once it is a business you need an ABN and must report the income, and reaching 75,000 dollars in annual turnover triggers GST registration — for that next stage, see the guide on starting a business.
Tax residents generally declare their worldwide income, but temporary visa holders benefit from the temporary resident exemption covering most foreign income — so your residency status is the first thing to establish. If you have rental, pension or interest income back home, start with the guide on non-residents and double taxation, which covers residency tests and FITO (the foreign income tax offset). Where you do need to report, enter it in the foreign income section of myTax, converting foreign currency to Australian dollars at the exchange rate on the date of receipt or the ATO's published annual average rate. Tax already paid in your home country can be credited through FITO to relieve double taxation.
The HELP (formerly HECS) student loan scheme changed dramatically in 2025. A one-off 20% cut to balances as at 1 June 2025 was legislated and applied to ATO accounts, and from 2025-26 the compulsory repayment threshold rose from 54,435 dollars to 67,000 dollars, with repayments switching to a marginal system that applies the repayment rate (15%, or 17% at higher incomes) only to income above the threshold rather than to all of it. Amounts withheld from your pay under HELP do not pay down the debt during the year — they accumulate until your tax return determines the actual repayment, and any excess is refunded. Moving overseas does not end your obligations: you must still report and repay based on worldwide income, so register your overseas contact details with the ATO before you leave.
A refund is not a bonus — it is simply the return of the excess when the tax withheld from your pay during the year exceeded your final tax bill. Withholding tables assume that pay continues evenly all year, so multiple jobs, arriving mid-year, leaving a job or receiving a bonus all easily cause over- or under-withholding. A large refund means you lent the government money interest-free all year; conversely, a bill to pay is a signal to review your withholding settings, such as where you claim the threshold. The ATO's tax withheld calculator lets you check during the year whether your withholding is on track.
Threatening calls claiming an arrest warrant has been issued, demands to pay tax with gift cards, cryptocurrency or wire transfers, and links inside text messages are 100% scams. The real ATO never mentions arrest, sends official notices to your myGov inbox, and does not put login links in texts or emails. During tax season (July to October), scams impersonating the ATO or the immigration department surge, targeting migrants less confident in English — if in doubt, hang up and call back directly on the official ATO numbers (13 28 61 for individuals, 1800 008 540 to verify a suspicious contact). Report scam attempts to Scamwatch (scamwatch.gov.au), and if you have already handed over information, alert your bank and the ATO immediately.
You must keep deduction evidence and income records for 5 years from the date you lodge your return, and digital copies — photos, PDFs, app records — are accepted; paper originals are not required. The trap is CGT assets: acquisition records are needed until 5 years after the return for the year you sell the asset, so for shares held 10 years, the purchase receipt may effectively need keeping for 15 years. Thermal-paper receipts fade within months, so photograph them the moment you get them, and consider a double backup of myDeductions records plus cloud storage.
If you are leaving Australia permanently during the financial year and expect no further Australian-source income, you can lodge early on a paper form instead of waiting for 30 June. The pre-departure checklist: update your myGov login email and phone number to ones that work overseas, keep an Australian bank account open to receive your refund, ask your employer to finalise your income statement early, and update your address with the ATO. If Australian income such as rent will continue after you leave, you are not eligible for early lodgment and must keep lodging annually. The super refund for temporary visa holders (DASP) is a separate process — see the DASP section in the superannuation guide.
Interest on a bank account opened without a TFN right after arrival, or wages where you did not submit a TFN declaration within 28 days of starting work, may have been withheld at 47% — effectively the top rate. Register your TFN now with your bank's internet banking and your employer's payroll system, and withholding returns to normal from then on. The amounts already taken are not lost: they are fully credited back as TFN amounts withheld on your tax return, refunding the difference against your actual rate. You can find the bank's TFN withholding in your pre-fill data or bank statements — make sure to include it in your first return.
Work-related clothing, tools, transport, education, WFH costs, donations.
Simple income: use myTax. Complex income: use a tax agent ($100-$300).
October 31 if you lodge yourself through myTax. A registered tax agent can lodge later under their program, but you must engage the agent before October 31.
Most online (myTax) lodgments are processed within 2 weeks, paid into your registered Australian bank account. Paper returns can take up to 50 business days.
If you leave permanently before the income year ends, you can lodge early using a paper tax return. Superannuation for temporary visa holders is claimed separately through DASP, not your Tax Return.