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Managing Money

Tax

Tax is money we are required to pay to the government so it can provide community services like health, education, defence, roads and railways, social security and welfare.

Whether you have a part-time, casual or full-time job you are required to pay tax.

To begin with, working out what you owe can seem like a daunting task. But it really isn't that difficult and the sooner you learn about it the easier it will become.

Income tax

There are a number of different kinds of taxes but it's likely the most relevant to you is income tax. Each financial year from 1 July to 30 June - you have to declare how much money you have earned to the Australian Tax Office (ATO).

This is done by filling out a tax return (new window). Depending on how much you made in the year your income is taxed at different rates (new window).

Pay as you go income tax (PAYG)

This is a system of estimating how much tax you are likely to owe by paying periodic instalments as you go. After the actual amount is calculated for that year you will be either refunded or asked to pay the difference. Find out more about the PAYG system (new window).

Going into business for yourself

If you are starting a new business you are required to register an Australian Business Number (ABN) (new window) and register for Goods and Services Tax (GST) (new window). GST is a 10 per cent tax on most goods and services that as a business owner you are required to collect and pay to the government each financial year.

Visit Getting Started - about income tax and deductions for small business (new window) for more information.

Managing your tax

While it may seem difficult at first calculating your tax should get easier the more times you do it. To help you get started here are some tips:

Getting help

For a fee you can get someone else to do the paperwork for you. Keep in mind that while you might have to pay money up front an experienced registered tax agent (new window), they may be able to do a better job at working out your entitlements and you may actually save money.

If you are on a low income and are struggling to understand how to work out your tax, the ATO has a Tax Help Program where trained community volunteers provide confidential free assistance (new window).

Links for tax

Australian Taxation Office (ATO)
Your primary source of information about tax with information for individuals and businesses.

Tax Practitioners Board
Includes a list of registered tax agents who are permitted to lodge tax returns on behalf of other people.

State Revenue Office (SRO)
This is the Victorian Government's major tax collection agency. Provides information relevant to pay-roll tax, duties (formerly known as stamp duty), land tax and debits tax.

Tax Payers Australia Inc
A not-for-profit organisation designed to educate tax payers about issues to do with tax and superannuation. Includes a section called 'tax tips' for more advanced taxation issues.

MoneySmart
Tax refund tips from the Australian Securities and Investments Commission (ASIC).

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