The simple answer is No. When completing you tax return you will get taxed on all income you have earned during the year. This can include interest received from your saving, dividends received and/or ABN income, these types of income usually do not include prepaid tax as you would on your wages.
Therefore, when your tax return is completed you will have to take these other types of income into consideration as they have not been previously taxed.
When completing your tax return the Australian Taxation Office (ATO) will assess all the income you earn and the tax withheld amount. Sometimes the total tax withheld may be more or less than the amount you need to meet your end- of-year tax liability, if:
- your income is $18,200 or less , you can claim the tax-free threshold
- too much tax is withheld , it may result in a tax refund
- too little tax is withheld , you may receive a tax bill to pay the difference.
Depending on your circumstances, you can request a change to the amounts of tax withheld from your income. This will help you to match your end-of-year tax liability more closely.
Example 1
Joe has two part-time jobs. Over the course of the 2023–24 income year, he receives:
- $30,000 first part time job– Joe’s payer applies the tax-free threshold to his fortnightly payments
- $30,000 from the second part-time job – Joe’s employer applies no tax-free threshold to his fortnightly payments.
The first part time job annual taxable income is $30,000 which is $1,153.84 per fortnightly with $106.00 tax withheld per fortnightly.
The second part time job has an annual taxable income of $30,000.00 which is $1,153.84 per fortnightly with $272.00 tax withheld per fortnightly.
At the end of the income year, the total tax withheld from Joe’s income will be $9,828 ($378 × 26).
When Joe lodges his tax return for the income year, the actual amount of income tax he has to pay, or tax refundable to him, will be calculated as follows:
Taxable income $60,000
Income tax payable on $60,000 $9,967
Less, Low income tax offset $100
Plus, Medicare levy (2% of $60,000) $1,200
Total tax and Medicare levy $11,067
Credit for total tax withheld $9,828
Tax payable $1,239
Joe will have a tax debt of $1,239 as insufficient tax was withheld during the income year.
Joe can ask one or both of his payers to withhold extra tax to cover the shortfall. Alternatively, he can put money aside to ensure that he can pay his tax bill when it falls due.
Author
Natasa Briffa
