Other FAQ

Income statements are now categorised into tax ready, not tax ready and year-to-date.

The reason for this is the Single Touch Payroll (STP) reporting system, which all employers must use,  means that your payroll data and super information is automatically sent to the ATO with each pay run, therefore making the issuing of annual payment summaries redundant. You will be able to see this in real-time by checking your myGov account.

Generally payers are required to finalise income statements within 14 days of the end of the financial year – i.e. 14 July. These can accessed through myGov or H&R Block can download if for you.

You must keep all the records, receipts and other documentation you have used to prepare your tax return. If you are claiming deductions, you must keep written evidence to verify your claims for those deductions.
If you are an individual, you must keep proper records relating to your tax affairs for at least five years from the date you lodged your tax return.
If you are a small business, you must keep proper records relating to your tax affairs for at least five years from when the business record is prepared or the transaction is completed, whichever occurs later.
If at the end of the five year period, you are involved in a dispute with the Commissioner (an audit, for example), the five year period is extended.
If you use information from your records in a later tax return, you may have to keep records for longer. So, if you carry forward a tax loss, you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.
If you own an asset which will be subject to capital gains tax on disposal, you will need to keep records covering the entire period of ownership until 5 years after lodgment of the tax return recording the disposal of the asset.

The Medicare levy surcharge is payable where your income (or your family income if you have a partner) is over a threshold amount and you and all of your dependents do not have adequate private hospital insurance. The threshold amount for a single taxpayer is currently $93,000 and for a sole parent, a couple or a family with one dependent child it is $186,000 for the 2024 year. These thresholds will increase to $97,000 and $194,000 for the 2024-25 tax year. If your income for surcharge purposes exceeds the relevant amount and you and all your dependents do not have private hospital cover, you will pay the surcharge. If you take out private hospital cover part way through the year, you will be liable for the surcharge for the number of days during the year that you and all of your dependents did not have private hospital cover, so it is worth checking if you will be over the threshold as soon as possible.

Income for surcharge purposes includes your taxable income, exempt foreign employment income, investment losses as well as reportable fringe benefits and reportable superannuation contributions. The private health insurance rebate and the Medicare levy surcharge are income tested against three income tier thresholds. Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase.
If you are unsure whether or not you will be liable to pay the surcharge, you should contact your H&R Block Tax Consultant on 13 23 25.

You are a temporary resident and, if your income for surcharge purposes is over the relevant threshold amount, you may be liable to pay the Medicare levy surcharge. The policy that you have is not sufficient to provide you with an exemption from the levy. However, if you are not eligible for medicare benefits, you may be able to apply for a medicare levy exemption, which will also exempt you from the surcharge. For more information contact your H&R Block Tax Consultant on 13 23 25.

How you apply for a TFN depends on your circumstances. Choose from one of the following to find out about the application options for:

• https://www.ato.gov.au/Individuals/Tax-file-number/Apply-for-a-TFN/Australian-citizens-with-an-Australian-passport---TFN-application/ – for people who are 15 years old or older.
• https://www.ato.gov.au/individuals/tax-file-number/apply-for-a-tfn/australian-residents---tfn-application/– for Australian citizens and other people who are residents of Australia for tax purposes but don't have an Australian passport.
• https://www.ato.gov.au/individuals/tax-file-number/apply-for-a-tfn/foreign-passport-holders,-permanent-migrants-and-temporary-visitors---tfn-application/– you need to already be living in Australia and will need a valid foreign passport or travel document (visa).
• https://www.ato.gov.au/individuals/tax-file-number/apply-for-a-tfn/people-living-outside-australia---tfn-application/ – for non-residents of Australia for tax purposes with Australian sourced income. You need a TFN to claim a refund of tax withheld.

Provided you have applied for a tax file number, you have 28 days to quote your tax file number to your employer.

One of the ways you can reduce the tax you pay is by salary sacrificing in return for employment related benefits. The advantage of salary sacrificing is that your benefit is purchased with pre-tax dollars. Find out more information and tips on salary sacrificing.

If you salary sacrifice into superannuation this will attract a contributions tax of 15%. For the 2025 year, if you are a middle income earner, with income of between $45,000 and $190,000, your marginal tax rate (including medicare) will be 32%, so salary sacrificing into your super will save you a significant amount of tax. 

However, any amounts that are sacrificed into superannuation will also be taken into account for the income tests that determine liability to pay the Medicare levy surcharge and the entitlement to claim dependent tax rebates and seniors tax offsets.

If you are in a lower tax bracket (between $18,200 and $45,000) from 1 July 2024, your marginal tax rate will be 15%, however you may also pay an additional 2% medicare levy. The tax saving in this tax bracket is minimal. This does not mean you should not consider contributing money to your super, but it might be more beneficial to make after tax contributions, and take advantage of the government superannuation co-contribution.  This can either be done through your employer or by you making your own contributions directly to your super.

Some people with two or more jobs or other tax income may be caught in an unintentional tax trap. The problem occurs even if the taxpayer and the employers do the right thing – as determined by ATO tax PAYG scales. The first job attracts the tax-free threshold while second and subsequent jobs are taxed in line with the progressive tax tables supplied by the ATO. It causes taxpayers to be, in effect, under-taxed on their ordinary earnings, which can result in a tax bill at the end of the financial year. Click for more information regarding multiple income sources or contact H&R Block and one of our Tax Consultants can assist you with this.

There is a separate tax category for people who are temporarily living in Australia. A permanent resident is generally taxed on all income in and out of Australia but a temporary resident is exempt from paying tax on certain classes of income. People who exhibit the behaviour of a 'resident' and hold a temporary visa granted under the Migration Act of 1958 will be taxed at resident rates. Temporary residents may also be liable to pay the Medicare levy unless they are eligible to apply for an exemption.

You would be considered to be a non-resident for tax purposes because you have not settled in any one place and established a home during your stay in Australia. However, you are also subject to the working holiday maker tax rates, which are 15% on all income earned up to $45,000. This also means that you are not entitled to the tax-free threshold. Accordingly, you will not get your tax back when you lodge a tax return because you will be charged working holiday maker rates. This means that you have to pay tax on every dollar of your taxable income. You will not have to pay the Medicare levy though.

Non-residents pay tax on Australian source income only. They pay tax on every dollar of taxable income as declared on their tax return but do not pay Medicare. The lowest tax rate for a non-resident is 30% for the 2024 year. Residents have to declare all income earned in and out of Australia. A tax free threshold of $18,200 is available to them and a resident may be entitled to claim some tax offsets (rebates) that are not available to non-residents. Depending on their income, a resident may also have to pay the Medicare levy and Medicare levy surcharge.

You should lodge your outstanding tax returns as soon as possible and before the Australian Taxation Office takes any action to have you lodge these tax returns. Once they have begun any action, it could result in a court conviction. The ATO may charge a penalty of $330 (from 1 July 2024)  for every 28 days that the return is outstanding. The maximum penalty is $1,650 even if you are due a refund. In addition, the ATO will charge interest. This is called the general interest charge and is levied on any outstanding monies. H&R Block can assist you to lodge your late prior year returns.

Your wife does need to lodge a return even though her income is below the tax free threshold. Any earnings that have had tax withheld, no matter how small, are required to be reported on a tax return. This is also the only way to get a refund of the tax paid.

It is necessary to complete a tax return to date of death if a return has been lodged in past years. This return, marked final, must show all income received to the date of death.

If you owe tax and lodge your return late, any amount owing will be payable on 21 November this year and a general interest charge will be calculated from then until payment is made. The ATO may charge a penalty of $330 for every 28 days that the return is outstanding. Unless you use a registered tax agent, you have from 1 July until 31 October to lodge your return. If you need an extension of time either contact the ATO or your local H&R Block for assistance on 13 23 25.

It isn't necessary to complete a return before leaving Australia unless you will not be back before the due date for lodgement of your return (31 October). If you won't be back until after that date contact the Australian Taxation Office or a registered H&R Block tax agent to apply for an extension of time to lodge.