If you earn money from work or investments, you usually pay tax on that money. Understand how tax works so you can work out how much tax you need to pay.
How tax works in Australia
When you earn money in Australia, you pay tax to the government (the Australian Taxation Office).
Money from tax is used by the government to provide services the community needs. Things like hospitals, schools, roads and public transport (buses, trains and trams).
Tax file number (TFN)
You need a tax file number (TFN) to manage your tax and superannuation (super). A TFN is unique to you and should be kept secure.
You can apply for a TFN from the Australian Taxation Office (ATO). Make sure to keep your TFN secure.
Paying tax
When you start a job, give your employer your TFN. They will deduct tax from each pay and submit it to the ATO.
If you work for yourself, you need to save and pay your own tax to the ATO.
Tax information in your language
For information about tax in your language, see the ATO's tax time resources.
Work out how much tax to pay
The amount of tax to pay depends on:
- how much you earn
- any expenses ('deductions') you can claim
You pay tax on money you earn, such as from your job. You also pay tax on things like investment earnings, businesses and income from outside Australia.
Medicare levy
Most people also pay a 'Medicare levy', which is 2% of your taxable income. This helps fund some of the public health care system in Australia, called Medicare.
The levy is applied when you lodge your tax return. If you're on a lower income, your levy may be reduced. Or you may not have to pay it at all.
How to reduce the tax you have to pay
You pay tax on any income you receive, less any expenses you can claim.
You may be able to reduce the amount of tax you pay if you claim for things like:
- work-related expenses
- union fees
- donations to charity
- the cost of doing your tax
You may qualify for tax 'rebates' (or a refund). These are applied after your tax has been calculated, such as for:
- low-income and middle-income earners
- caring for an invalid relative
- seniors and pensioners
- the taxable part of a superannuation (super) income stream
Lodging your tax return
If you're doing your tax yourself, you need to lodge your tax return with the ATO by 31 October each year.
If you need help to do your tax, consider getting a tax agent or accountant to help you. Their fees can be deducted from your return.
ATO's TAX Help Program
If you earn $60,000 or less you may be eligible for the ATO's Tax Help program. Tax Help is a free and confidential service that runs from July to October each year.
The ATO's trained volunteers help people lodge their tax returns online, by phone, or in person at a Tax Help centre. These are located around Australia.
Get help if you need it
There is free help available, if you need it:
- For help in your language, call the translating and interpreting service TIS National on 131 450. They will get an interpreter to call the service you need help with.
- For help to sort out money issues, call the free National Debt Helpline on 1800 007 007. The helpline is open Monday to Friday, 9:30am to 4:30pm.