Tax return in Australia: income, deductions and Medicare Levy for TFN workers

If you're an immigrant in Australia working with a TFN (Tax File Number), lodging your tax return may seem complicated at first — but in most cases it's straightforward and you can do it yourself, for free, on the government's website.

This guide is for people working as employees (one or more jobs on the TFN). For an introduction to what a tax return is and who needs to lodge one, see the base tax return article.

What you'll learn here

• How to verify and confirm your income in the system
• Which deductions you can (and can't) claim
• What to do about Medicare Levy if you don't have access to Medicare
• How to enter each piece of information in myTax step by step

The system: myTax via myGov

The Australian government has a free system called myTax, accessible through myGov (my.gov.au). It works directly in the browser, including on mobile.

To use myTax you need to

1. Create a myGov account
2. Link your myGov account to the ATO
3. Access: myGov → Australian Taxation Office → Tax → Lodgments → Income Tax

When to lodge

• The Australian financial year runs from 1 July to 30 June
• The deadline to lodge is 31 October
• If you use a registered tax agent, the deadline is automatically extended
• If there's a refund, it usually arrives within 2 weeks

How myTax is organised: the 4 steps

When you enter myTax and select the financial year, the system walks you through 4 steps in sequence. Knowing the flow before you start helps you stay on track:

1. Contact details — confirm your address and email. The ATO uses this information to contact you if needed.

2. Financial institution details — confirm the bank details where your refund will be deposited. If your account has changed since your last tax return, update it here.

3. Personalise return — questions about your situation in the financial year: were you an Australian resident for tax purposes? Did you have a spouse? The answers determine which sections appear in the next step.

4. Prepare return — the main part: income, deductions, Medicare and health insurance. This is what the sections below describe in detail.

The magic of pre-fill: check your income first

One of the most useful features of the Australian system is pre-fill: the ATO automatically downloads most of your income information directly from your employers, banks and the government. You don't have to type everything from scratch.

What comes pre-filled

• Salaries and wages from all your jobs (via Single Touch Payroll — STP)
• Tax withheld
• Superannuation contributions
• Bank income (interest)
• Health insurance information

How to check Income Statements

After entering myTax and selecting the financial year, go to: myGov → ATO → Employment → Income Statements

Each income statement appears with one of two statuses:

• ✅ "Tax ready" — the employer has finalised it, you can use it
• ⚠️ "Not tax ready" — the employer hasn't finalised it yet, wait or contact them

If you had multiple jobs, they'll all appear listed separately. If one is missing, contact the employer to confirm they're reporting via STP. If needed, call the ATO: 13 28 61.

What to check in each income statement

• Employer name
• Total salary and wages
• Total tax withheld
• Reportable fringe benefits (if any)
• Reportable employer super contributions (if any)

What you need to declare as income

In addition to pre-filled salaries, check and potentially add:

Salaries and wages (multiple jobs)

In myTax: Prepare Return → Income → Salary, wages, allowances, tips, bonuses

If you worked at 2, 3 or 4 jobs, they should all appear. Click Add/Edit to review each one:

Bank income (interest)

If you have a bank account, any interest received comes pre-filled. Check whether the amounts match your bank statements.

Income received outside Australia — do you need to declare it?

A very common question: "Do I need to declare the rent I receive from Brazil? What about money invested back home?"

For the vast majority of immigrants on temporary visas, the answer is no.

Who is considered a temporary resident by the ATO?

The ATO defines a temporary resident as someone who:

• Holds a temporary visa (482, student, working holiday, 417, 485, etc.), AND
• Neither you nor your spouse is an Australian citizen or permanent resident

In practice: if you're in Australia on a temporary visa and receive rent, interest or other income from your home country, you generally don't need to declare it in your Australian tax return. Declare only what you earned here.

Exceptions — when the rule changes

• If you have a HELP, VSL or AASL debt (Australian government student loans), you'll need to declare your worldwide income
• Income from work or services physically performed outside Australia may have different rules
• Anyone who has previously had permanent residency or Australian citizenship has different rules

Legal deductions: what you can claim

The reality: most people have few deductions — and that's fine

Most immigrants start working in hospitality, construction, delivery, aged care or cleaning. For these profiles, available deductions are limited.

If your job doesn't require working from home, doesn't involve travel between multiple locations, and you don't wear a company-branded uniform or buy your own PPE, your tax return will be simple — confirm the income, check the income statements and submit. This is the most common scenario.

Understand each type of deduction below and assess what applies to your situation.

Home office (working from home)

People who work on-site — in a restaurant, café, construction site, hospital or doing delivery — are unlikely to qualify for this deduction. But if you have a formal arrangement with your employer to work from home for part of your duties, it's worth checking with a professional.

🔗 Official rule: ATO — Working from home expenses

Method 1: Fixed Rate — 70 cents per hour (simpler)

• Amount: $0.70 per hour worked from home in 2024–25
• What it covers: electricity, gas, internet, phone, stationery and consumables — all included
• No dedicated office required — the kitchen table counts
• You can't claim internet or phone separately if you use this method

Mandatory documentation

• Record of all hours worked from home throughout the entire year (spreadsheet, timesheet, diary or roster)
• At least one bill for each service covered (electricity, internet, phone)
• The ATO does not accept retrospective estimates — records must be kept throughout the year

In myTax: Deductions → Other work-related expenses → Working from home

Method 2: Actual Cost

Calculates the real cost of each expense (electricity, internet, phone, etc.). May result in a larger deduction but requires significantly more record-keeping. Recommended for those with high household costs or a dedicated home office.

Transport and work-related travel

This is the most misunderstood deduction — and where the most errors occur.

What you CANNOT deduct

• Travel from home to work and back — even if it's far, by Uber or public transport
• Restaurant, café, construction or hospital workers: the commute is not deductible
• Delivery riders: the trip from home to the first pickup point is not deductible

What you CAN deduct

Practical example: Carlos works mornings at a café and afternoons at a supermarket. The trip from the café to the supermarket (without going home) may be deductible. The trips from home to the café and from the supermarket back home are not.

Documentation: public transport, taxi or Uber receipts. If using your own car, the ATO requires a logbook with specific records.

In myTax: Deductions → Work-related travel expenses → Add/Edit

Uniform, work clothing and laundry

This section causes the most confusion — especially for hospitality workers.

The ATO only allows the deduction when the clothing identifies you as an employee of a specific company (has the logo) or protects you from physical risks at work.

What you CAN deduct

Uniform with company logo

• Shirt, jacket or apron with the employer's logo permanently affixed (embroidered or factory-printed — not a sticker)
• Uniform registered in the ATO's Register of Approved Occupational Clothing

Protective clothing (regardless of logo)

• Steel-capped safety boots
• Hard hat, hi-vis vest, protective gloves, safety glasses
• Flame-resistant trousers and shirts for work with fire risk
• Leather apron for welding

Occupation-specific clothing

• Nursing, aged care or healthcare scrubs or lab coat
• Chef's coat (the traditional long-sleeved white one — specific to the profession)

Laundry of these items: up to $150 without a receipt — but only if the total of all your deductions is ≤ $300.

What you CANNOT deduct — real examples

In myTax: Deductions → Work-related uniform, occupation-specific and protective clothing → Add/Edit

Tools, equipment and technology

If you bought items to use at work and paid out of your own pocket (not reimbursed by your employer):

Valid examples: hand tools for construction, a laptop used for work (by the % of professional use), headphones for work calls, professional software you paid for yourself.

Who probably doesn't have this deduction: those working in restaurants, cafés, bars or aged care — equipment is generally provided by the employer.

In myTax: Deductions → Other work-related expenses → Tools, equipment and other assets

Education and professional training

You can deduct

• A technical course to improve skills in your current job
• Certifications required or recognised in your current field (e.g. white card for construction)
• Professional licence required to perform the role
• Books and course materials

You cannot deduct

• General English courses — the ATO considers them personal education, not profession-specific
• Courses to change careers or fields
• University degree or initial qualification
• Courses preparing you for a job you don't yet have

Union fees and other common deductions

Union fees — the most forgotten and easiest deduction:

If you pay union fees (SDA, CFMEU, NUW, HSU, etc.), the amount is deductible and usually appears pre-filled in the income statement. Typical amount: $200–$500/year depending on the sector.

Phone and internet (without home office)

If you don't use the Fixed Rate home office method but use your own phone for work, you can deduct the percentage of professional use.

General rules that apply to all deductions

1. The expense was not reimbursed by the employer

If the company paid for or reimbursed the cost — uniform, tools, course, transport — you cannot deduct it. Only what came out of your own pocket and stayed that way is deductible.

2. The $300 rule

You can claim up to $300 in work-related deductions without providing receipts. But that doesn't mean you can include things you didn't actually spend. The amount must be real — the difference is that below $300 the ATO doesn't require proof. Including deductions you're not entitled to is tax fraud.

3. If a tax agent includes items you don't recognise, ask

• "Did I actually incur this expense?"
• "Why am I entitled to this deduction?"

A good professional will be able to explain.

How much each deduction is worth

For those earning between $60k and $80k, the marginal rate in 2024–25 is 30%. Every $100 of valid deduction means approximately $30 back in your pocket.

Summary: who probably does (or doesn't) have deductions

Deductions summary — where to enter in myTax

Is it worth hiring a tax agent?

For most immigrants with a TFN and a straightforward situation — one or two jobs, no investments or rental income — myTax is sufficient and free. But a tax agent can help if you have questions, multiple deductions to calculate or want extra peace of mind.

Estimated market cost (2025–26)

🔗 To find a registered tax agent: tpb.gov.au — Find a registered tax practitioner

Medicare Levy and the exemption for immigrants

What is the Medicare Levy?

Every Australian resident pays 2% of their taxable income as Medicare Levy — this is what funds the public healthcare system. For someone earning $80,000, that's $1,600 per year.

What about those without access to Medicare?

Many immigrants on temporary visas (482, students, working holiday, etc.) are not entitled to Medicare. In those cases, you can apply for a full or partial Medicare Levy exemption.

To do this, you need a document called a Medicare Entitlement Statement (MES), issued by Services Australia. It proves the period during which you had no entitlement to Medicare.

For information on how to apply for the MES (form MS015, deadlines and where to send it), see the base tax return article.

How to enter the exemption in myTax

1. In myTax, go to the Medicare section
2. Select Medicare levy reduction or exemption
3. Answer Yes if you were in an exemption category during the year
4. Enter the number of exempt days in the Full 2% levy exemption – number of days field
5. Answer Yes to the question: "Were you a temporary resident for Medicare purposes and have a Medicare entitlement statement from Services Australia?"

Example: Priya spent the entire financial year without Medicare access. She enters "365" as the number of exempt days and answers Yes about having the MES.

🔗 Medicare levy exemption — not entitled to Medicare benefits

Private health insurance

If you have private health insurance in Australia, the system will ask about it in the Medicare Levy Surcharge section.

The Medicare Levy Surcharge (MLS) is an additional tax (1% to 1.5%) for people who:

• Don't have private hospital cover, AND
• Earn above ~$93,000/year (for singles)

If you have private health insurance, your provider sends the data directly to the ATO and it appears pre-filled. Check that the policy number and coverage period are correct.

In myTax: Medicare → Private health insurance

Investments, shares and other income

If you have shares, ETFs, cryptocurrencies, rental income or other more complex income sources, this article doesn't cover those cases — they involve Capital Gains Tax (CGT) and other considerations that deserve attention from a professional.

The ATO has detailed guides:

• Dividends and shares
• Capital Gains Tax (selling shares)
• Cryptocurrencies
• Rental income

Checklist before submitting

Before clicking Submit, confirm:

• All your jobs appear in the income section
• All income statements are listed as Tax ready
• The gross income and tax withheld figures match your payslips
• You've only entered deductions for expenses you actually had
• If exempt from Medicare, you've entered the number of days and answered the MES question
• If you have health insurance, the details are correct in the Medicare section
• You have documentation to support all deductions (if total > $300)
• Your bank account details for the refund are correct in myGov

Quick summary: the 6 steps of your tax return

Resources and useful links

Official ATO links

• Lodge your tax return online with myTax
• Work-related deductions — overview
• Working from home — Fixed Rate Method
• Medicare levy exemption
• Pre-filling your online tax return

If you need help

• Tax Help Program (free, for those earning up to ~$60,000): ato.gov.au/taxhelp
• National Tax Clinics (free): nationaltaxclinics.gov.au
• Registered Tax Agent (paid, but deductible): tpb.gov.au
• ATO by phone: 13 28 61 (English)