Personal Income Tax, Without the Jargon
If you're an Australian resident for tax purposes, you're taxed on income from both Australian and overseas sources — wages, interest, dividends, rent, capital gains and side income all count.
Your employer withholds tax through the year based on an estimate. Your tax return is where that estimate gets corrected: you declare what you actually earned, claim what you're actually entitled to, and the ATO works out whether you're owed a refund or have tax to pay.
Deductions reduce your taxable income — they don't come off your tax bill dollar for dollar. Which is exactly why it pays to claim everything you're entitled to, and nothing you're not.
What isn't deductible: private health insurance premiums, childcare, the interest on your own home loan, life insurance, plain clothes you could wear anywhere, and the daily trip between home and your regular workplace.
Common personal income tax questions
What are the current income tax rates?
Australia uses marginal rates, which is where most people trip up. You don't pay your top rate on every dollar you earn — only on the portion that falls inside that bracket. Here's how the brackets actually work.
Do I have to lodge a tax return?
If tax was withheld from your pay, you almost certainly do — and if you skip it, you may be leaving a refund sitting with the ATO. There are exceptions. Check where you sit.
Do I have to pay tax?
Below the tax-free threshold, generally not. But a second job, an investment, or the Medicare levy can change the answer — and the tax taken out of your pay is only ever an estimate.
How much tax do I pay as a pensioner?
Reaching pension age doesn't automatically make you tax-free. It depends on what you earn on top of the pension, and on the offsets available to seniors. Here's what applies once you retire.
Common Deductions for an Individual Tax Return
What to Bring to your Tax Appointment
Check these off as you gather them. The more complete this list is when you arrive, the faster your return is lodged — and the less likely we are to be chasing you in three weeks.
New to Kasker? Bring last year's return as well so we can carry forward anything that matters.
Always bring:
These normally appear on your ATO income statement. Bring them only if they're missing or look wrong.