Getting a tax refund can be a bit like Christmas in July. The money always comes in handy just when you need it.
But getting a tax refund as an individual tax payer in Australia, means it has to be refunded from the tax you pay to the ATO. This individual tax is based mainly on income you receive from salary, wages and investment income.
As a wage or salary earner, you pay income tax during the year as you earn the income. This is called ‘pay as you go’ (PAYG).
The amount of income tax you pay is linked to how much you earn and whether you’re an Australian resident. The more you earn, the higher your rate of tax.
As an employee, you have little control over the tax that is deducted from your wages each pay period. Your employer uses The ATO tax rate calculator to work out how much income tax to take out of your wages. They then send it to the ATO. This is called PAYG withholding.
Income tax deductions
Remember that your employer is not required to be aware of any deductions that you could get. Employers are only obligated to deduct the amount that the ATO requires as per the tax rate calculator.
This means is that you could be eligible to get some of your tax back at the end of the financial year.
Getting a tax refund.
Getting money back from the ATO as refund on the tax you have paid is based on a set of tax rules.
Tax refunds can be given for variety of reasons. But without knowing the tax rules, it can be difficult to know just what deductions and refunds you are entitled to. Whether you are wage earner, contractor or salary earner, you are most likely due a tax refund this year.
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Using Instant Tax Refunds registered tax agents is great way to make sure you get the best and biggest refund.
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