What is the tax return?

The Australian financial year runs from 1 July to 30 June. Once the year closes, you have until 31 October to lodge your return with the ATO (Australian Taxation Office). It covers all your income and deductions for the year — and the ATO does the maths: either you owe more tax, or you get a refund.

Why do most people get a refund?

The tax withheld from each pay is calculated assuming you'll earn that amount all year. The employer takes that pay's salary, projects it over 12 months and applies the proportional rate.

In practice, that creates two very common situations:

  • Variable income (casual, overtime, multiple jobs): the higher-pay months generate more withholding than needed — and the difference comes back to you at tax return time
  • Arrived mid-year: you worked only part of the financial year, but the system withheld as if the income ran for 12 months. Refund almost guaranteed in most cases

People with fluctuating income or who arrived recently in Australia tend to get the biggest refunds.

Important dates

1 July: financial year starts and the tax return opens

31 October: deadline to lodge the tax return on your own

Up to 15 May the following year: deadline if you use a tax agent (accountant)

How to lodge the tax return

Go to myGov.com.au and link your account to the ATO

Most of your salary information already appears automatically — the employer reports straight to the ATO.

Check the pre-filled information

Salary, tax withheld, super. Make sure the numbers add up.

Add deductions

Work-related costs you can deduct — the list is right below.

Lodge the return

With everything organised, the process takes 20–30 minutes.

Receive the refund

Straight into your Australian bank account, in 2–4 weeks.

Doing it yourself or using an accountant — a practicality decision

Using an accountant is always valid — but understanding the process yourself is worth a lot too. Knowing how it works gives you grounds to question, plan and anticipate situations.

Doing it yourself: for students and anyone with a simple situation (one job, no ABN), myGov pre-fills most of it. The ATO website explains everything, for free.

Using an accountant (tax agent): use one whenever you don't feel comfortable. The accountant's fee is deductible in next year's tax return — but note: you don't get the whole amount back. Accountant charged A$150 and your rate is 18%? You get A$27 back, not A$150. Use one when the complexity justifies it.

What you can deduct

Organise your information and receipts BEFORE going to the accountant

Showing up at the accountant with everything in a mess — receipts scattered, invoices missing, incomplete statements — means more time, more room for error and, almost always, a higher bill. Organise first: salaries received, tax withheld (from the income statement in myGov), deduction receipts, bank statement, receipts for courses, uniform, vehicle and other deductible expenses.

DeductionExampleCondition
Working from homeInternet, proportional electricityProven remote work
Uniform / PPESafety boots, logo uniformRequired by the employer
Courses and trainingCourse related to your current jobRelated to current employment
Books and professional materialsTechnical books, professional subscriptionsWork-related
Union feesYour industry union's membership feeIf you're a member
Vehicle (work use)Km driven for work (not home↔work)Usage log required

📌 Source: ATO — Deductions you can claim

Tax table 2026–27

Annual incomeRate
Up to A$18,2000% (tax-free threshold)
A$18,201 – A$45,00015% (reduced from 19% by Stage 3)
A$45,001 – A$135,00030% (reduced from 32.5% by Stage 3)
A$135,001 – A$190,00037%
Above A$190,00045%

📌 Source: ATO — Individual income tax rates 2026–27 · The 15% rate has been in force since 1 July 2026 — check the current rates directly with the ATO before using these figures.

On top of income tax, most people pay the 2% Medicare Levy on all taxable income. If you're not entitled to Medicare, you can request an exemption — explained further below.

Practical example — earning A$70,000/year

The Australian system is progressive: each bracket of your income is taxed at that bracket's rate — not everything at the top rate.

Income bracketAmount in bracketRateCalculationTax
A$0 – A$18,200A$18,2000%A$18,200 × 0%A$0
A$18,201 – A$45,000A$26,80015%A$26,800 × 15%A$4,020
A$45,001 – A$70,000A$25,00030%A$25,000 × 30%A$7,500
Subtotal — income taxA$0 + A$4,020 + A$7,500A$11,520
Medicare Levy2%A$70,000 × 2%A$1,400
Total tax for the yearA$12,920
Effective rateA$12,920 ÷ A$70,000~18.5%
Estimated annual net salaryA$57,080

⚠️ Illustrative example. Applies 2026–27 rates for a tax resident with the tax-free threshold active and no dependants. Does not include offsets (LITO). Use the ATO calculator for a precise calculation.

Medicare Levy — exemption for those not entitled to Medicare

In Australia on a temporary visa without Medicare access (student, 482, WHV etc.)? Then you don't need to pay the 2% Medicare Levy — but you have to prove it with a document called the Medicare Entitlement Statement (MES).

How to request the Medicare Entitlement Statement (MES)

When to request it: from 1 July each year. It can take up to 8 weeks in peak periods (Jul–Nov). Request it early — you need the MES in hand before lodging your tax return.

How to request it:

  • Online via myGov (recommended): go to myGov → link the IHI service → access the MES panel
  • By email: send the completed MS015 form + a copy of your passport to medicare.entitlement@servicesaustralia.gov.au
  • By mail: Services Australia — Medicare Entitlement Statement Unit, GPO Box 9822, Adelaide SA 5001

How to use it: in the tax return via myTax, in the Medicare Levy section, enter the number of days covered by the MES.

📌 Official MS015 form: servicesaustralia.gov.au/ms015

Application for a Medicare Entitlement Statement
Form MS015 — Services Australia
MAIN FORM FIELDS
1
Full name
First name / Middle name(s)Your first name
Family nameYour family name
Date of birthDD/MM/YYYY
Tax file number (TFN)Your TFN
Passport numberPassport no.
Country of issueYour country
2
Income year for which you are claiming (financial year ending 30 June)

E.g.: 2025 (for the year 1 Jul 2024 – 30 Jun 2025)

⚠️ Attach a copy of your passport photo page · Sign the declaration at the end
📌 Full official form: servicesaustralia.gov.au/ms015

Private insurance and the Medicare Levy Surcharge — for permanent residents

Became a permanent resident (PR) with income above roughly A$93,000/year? Without a registered Australian private hospital cover, an additional tax called the Medicare Levy Surcharge may apply. Depending on your income, holding private cover can be cheaper than paying the surcharge. Consult an accountant to see what applies to your situation.

Income received abroad — do you need to declare it in Australia?

A classic question among immigrants. The ATO's answer for temporary residents:

"People who are also temporary residents for income tax purposes generally don't pay tax in Australia on income they earn in another country. Most of your foreign income is not taxed in Australia."

— ATO — Foreign and temporary resident income

In plain terms: if you're a temporary resident for tax purposes (temporary work visa, student visa etc.) and you receive income from your home country — property rent, freelance work, dividends — that income is generally not taxed in Australia and doesn't need to go into your Australian tax return.

This is an interpretation of the ATO website — confirm with an accountant

The exact application depends on your individual situation — visa type, nature of the income, whether you hold assets or obligations back home. Confirm with an accountant before acting.

ABN — double the attention at tax return time

Official sources