Understanding Tax
Tax is the amount of your income that the government collects (whether you like it or not) to help pay for things like roads, schools and hospitals
where to start
You need to know about tax as soon as you start earning
But that doesn’t mean you’ll need to pay anything right away. The tax-free threshold (currently set at $18,200 in January 2019) means you won’t need to pay tax until you earn more than that amount in a financial year.
The $18,200 tax-free threshold is equivalent to:
$350 a week
$700 a fortnight
$1,517 a month
And when you earn more than that amount you only pay tax on the extra (not the whole amount).
Taxation
How tax works
If you’re an employee, then your employer should take care of paying your tax directly to the ATO (Australian Taxation Office) on your behalf. If you run a business, or work as a sole trader, then you’ll need to take care of your own tax and ensure it’s paid as part of your business reporting requirements.
At the end of each financial year, you’ll need to check if you’re required to lodge a tax return. If you need to lodge a return, it’s easy to do online. Your employer should take care of paying your tax on your behalf throughout the year, and you can sometimes claim for a refund, depending on what you’ve earnt and how much you’ve paid.
