Income Tax Filing
Written in plain language for general understanding. This is educational content, not legal advice. Based on Commonwealth Acts of Parliament, federal regulations, and official government guidance.
What is this right?
Every Australian resident who earns income must lodge an income tax return with the Australian Taxation Office (ATO) each financial year (1 July to 30 June). The rules come from the Income Tax Assessment Act 1997 (ITAA 1997).
Australia uses a progressive tax system. The first $18,200 you earn is tax-free. After that, rates increase in brackets: 16% on income from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000 (rates effective from 1 July 2024). A 2% Medicare levy also applies to most taxpayers.
If you lodge your own return, the deadline is 31 October after the end of the financial year. If you use a registered tax agent, you may get an extension, often until 15 May the following year. Late lodgement can result in a Failure to Lodge (FTL) penalty of up to $1,565 per 28-day period.
Most employers report your income directly to the ATO through Single Touch Payroll (STP), so your income statement is pre-filled in myTax.
When does it apply?
This applies to all Australian residents for tax purposes who earn above the tax-free threshold.
- You must lodge a return if your taxable income exceeds $18,200, or if you had tax withheld from payments and want a refund.
- Foreign residents are taxed from the first dollar with no tax-free threshold.
- Even if your income is below $18,200, you may need to lodge to claim a refund of withheld tax.
What should you do?
- Lodge on time — by 31 October if self-lodging, or register with a tax agent before that date for an extension.
- Use myTax through your myGov account — most income and deduction information is pre-filled.
- Check your income statement is marked as 'Tax ready' before lodging.
- Keep records for 5 years from the date you lodge your return.
- Claim the tax-free threshold on your TFN declaration with your main employer.
- Report all income — wages, interest, dividends, rental income, and gig economy earnings.
What should you NOT do?
- Don't ignore lodgement deadlines — the ATO charges FTL penalties and may issue a default assessment.
- Don't leave out income — the ATO receives data from banks, employers, and share registries and will detect omissions.
- Don't claim the tax-free threshold with multiple employers — you can only claim it once. Doing so may result in a tax debt at year-end.
- Don't wait for your tax agent to contact you — make sure you are registered with them before 31 October.
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