What is a tax return?

The Australian financial year runs from 1 July to 30 June. After the year closes, you have until 31 October to lodge your return with the ATO (Australian Taxation Office). In it you report all income and deductions for the year — and the ATO calculates whether you owe more tax or are entitled to a refund.

Why do most people get a refund?

The tax withheld from each pay is calculated by assuming you will earn the same amount all year. Your employer takes that pay, projects it over 12 months, and applies the proportional tax rate.

In practice, this creates two common situations:

  • Variable income (casual work, overtime, multiple jobs): higher-pay months trigger more withholding than necessary — and you get it back at tax time
  • Arrived mid-year: you only worked for part of the financial year. Because the system projects a full year, tax was withheld as if you had income for 12 months — but you didn't. A refund is almost guaranteed in most cases

People with variable income or who recently arrived in Australia tend to receive the largest refunds.

Key dates

1 July: the financial year begins and lodgements open

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

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

How to lodge your tax return

Log in to myGov.com.au and link your account to the ATO

Most of your income information is pre-filled automatically — your employer reports it directly to the ATO.

Check the pre-filled information

Salary, tax withheld, super. Confirm that the amounts are correct.

Add deductions

Work-related costs you can claim — see the list below.

Lodge your return

The process takes 20–30 minutes if you have everything organised.

Receive your refund

Directly to your Australian bank account, within 2–4 weeks.

Doing it yourself vs. using an accountant — a practical decision

Using an accountant is always a valid option — but understanding the process yourself also has real value. Knowing how it works helps you ask the right questions, plan ahead, and anticipate future situations.

DIY: for students and people with simple situations (one job, no ABN), myGov pre-fills most of the return. The ATO website explains everything for free.

Using a tax agent: use one whenever you don't feel comfortable doing it alone. The accountant's fee is deductible on the following year's tax return, but you don't recover the full amount: if the accountant charges A$150 and your marginal rate is 18%, you recover A$27 — not A$150. Use an accountant when the complexity justifies the cost.

What you can deduct

Organise your information and receipts BEFORE seeing an accountant

Arriving at an accountant with everything in disarray — receipts scattered, invoices missing, incomplete statements — means more time spent, a greater chance of error, and usually a higher bill. Organise first: salary received, tax withheld (from your income statement in myGov), deduction receipts, bank statements, and notes for courses, uniforms, vehicle use, and other deductible expenses.

DeductionExampleCondition
Working from homeInternet, proportional electricityProven remote work arrangement
Uniform / PPESafety boots, logo-branded uniformRequired by employer
Courses and trainingCourse related to your current jobMust relate to current employment
Professional books and materialsTechnical books, professional subscriptionsRelated to your work
Union feesMembership fees for your industry unionIf you are a member
Vehicle (work-related use)Km driven for work (not home↔work commute)Logbook or record required

📌 Source: ATO — Deductions you can claim

Tax rates 2025–26

Annual incomeRate
Up to A$18,2000% (tax-free threshold)
A$18,201 – A$45,00016% (reduced from 19% under Stage 3)
A$45,001 – A$135,00030% (reduced from 32.5% under Stage 3)
A$135,001 – A$190,00037%
Above A$190,00045%

📌 Source: ATO — Individual income tax rates 2025–26 · Stage 3 tax cuts in effect from 1 July 2024 — verify current rates directly with the ATO before using these figures.

In addition to income tax, most people pay the Medicare Levy of 2% on all taxable income. People without access to Medicare may apply for an exemption — see below.

Practical example — earning A$70,000/year

The Australian system is progressive: each portion of your income is taxed at the rate for that bracket — not all of it at the highest rate.

Income bracketAmount in bracketRateCalculationTax
A$0 – A$18,200A$18,2000%A$18,200 × 0%A$0
A$18,201 – A$45,000A$26,80016%A$26,800 × 16%A$4,288
A$45,001 – A$70,000A$25,00030%A$25,000 × 30%A$7,500
Subtotal — income taxA$0 + A$4,288 + A$7,500A$11,788
Medicare Levy2%A$70,000 × 2%A$1,400
Total tax for the yearA$13,188
Effective tax rateA$13,188 ÷ A$70,000~18.8%
Estimated annual take-home payA$56,812

⚠️ Illustrative example. Applies 2025–26 rates for an Australian tax resident with the tax-free threshold active and no dependants. Does not include offsets (LITO). Use the ATO tax withheld calculator for an accurate figure.

Medicare Levy — exemption for those without Medicare access

If you are in Australia on a temporary visa without access to Medicare (student, 482, WHV, etc.), you do not need to pay the 2% Medicare Levy — but you must prove this with a document called the Medicare Entitlement Statement (MES).

How to apply for the Medicare Entitlement Statement (MES)

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

How to apply:

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

How to use it: in your tax return via myTax, in the Medicare Levy section, enter the number of days covered by your 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 surname
Date of birthDD/MM/YYYY
Tax file number (TFN)Your TFN
Passport numberYour passport number
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 health insurance and Medicare Levy Surcharge — for permanent residents

If you have become a permanent resident (PR) and earn above approximately A$93,000/year, you may be charged an additional tax called the Medicare Levy Surcharge if you do not hold a registered private hospital cover plan in Australia. Depending on your income, private cover may actually be cheaper than paying the surcharge. Consult an accountant to understand what applies to your situation.

Income received in your home country — do you need to declare it in Australia?

This is a very common question among immigrants. According to the ATO, 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 other words: if you are a temporary resident for tax purposes (temporary work visa, student visa, etc.) and you receive income from your home country — rental income, freelance work, dividends — that income is generally not taxed in Australia and does not need to be reported on your Australian tax return.

This is based on the ATO website — confirm with an accountant

The exact application depends on your individual circumstances — visa type, nature of the income, and whether you have assets or obligations in your home country. Confirm with an accountant before acting.

ABN — extra care required with your tax return

Official sources