New to Tax? Let us help with the basics!

Jul 14, 2023

 

If you start to panic when it comes to the ‘life hacks’ they don’t teach you in school, you’re not alone. Tax can be SCARY, we get it. But, let us talk you through the basics so you’re fully equipped to get your first job and make that cash money.

Let’s start with tax. What is it? Tax is a portion of your income that goes to the government to fund things like public transport, schools, hospitals, welfare and disaster relief and more. Having these services depends on us all paying our taxes.

When you start your first job, you will need a Tax File Number. It's free to apply and this is a personal reference number for everything tax-related.

Your employer will pay your wage, and will also withhold any tax you owe and send it to the ATO on your behalf. Your payslips will show you how much tax has been withheld for that pay period and for the year to date. The tax you pay each pay cycle is based on the assumption that you earn that amount every pay cycle. For example, one week you might earn $500 and be taxed more than the previous week when you earned $150. This all evens out when you do a tax return.

In Australia currently, if you earn under $18,200 in the financial year (which is July - June the next year) you do not owe any tax. The amount will still come out of your pay every pay cycle, however you can get it back at the end of the financial year! You just have to lodge a tax return online with the ATO before October 31 for the previous financial year. This is really easy to do and the info can all be found on this site.

See? Not so scary! The ATO has heaps of helpful information to take the guess-work out of tax and super. Take a look around the ATO website to learn more.