Tax Return Calculator for Australia

Australia: PAYG withholding, the tax return and the new standard deduction

Most Australian employees lodge an individual tax return for each income year, which ends on 30 June. Your employer withholds tax from each pay under the PAYG withholding schedules, which treat every pay as if you earned at that rate all year and claimed nothing. The return replaces that guess with the actual figure: tax on your taxable income at the resident rates, less the low income tax offset, plus the 2% Medicare levy, any Medicare levy surcharge and any compulsory study loan repayment. Whatever was withheld beyond that comes back as a refund.

Refunds arise for a few recurring reasons. Someone who worked only part of the year had each pay taxed as if it would continue for twelve months, so the tax-free threshold of $18,200 was only partly used. Deductions never reach the withholding at all. And from the 2026-27 income year, every resident with salary or wages can deduct $1,000 for work-related expenses without keeping receipts. That deduction is reduced dollar for dollar by any work expenses you itemise, so it is worth itemising only when your expenses come to more than $1,000. For 2025-26 and earlier years there is no standard deduction, and work claims above $300 in total need written evidence.

Two items can turn a refund into a bill. Without private hospital cover, an income over $105,000 in 2026-27 attracts the Medicare levy surcharge of 1% to 1.5% of your whole taxable income. A HELP or other study loan adds a compulsory repayment once income passes $69,528, collected through the same assessment, though never more than the balance you still owe.

The return opens in myTax from 1 July, prefilled with your income statements once your employers mark them tax ready. Lodging it yourself, the deadline is 31 October; a registered tax agent can usually lodge later.