Australian Tax Return Guide: Step-by-Step for Employees

A successful tax return requires gathering the right information before you log into myTax. The ATO pre-fills much of this data, but you need to verify its accuracy - and add anything missing.

• Tax File Number (TFN): You need your TFN to log into myGov and access myTax; if you have lost it, it appears on your previous tax return or can be obtained from the ATO
• myGov account: Create a myGov account at my.gov.au and link the ATO service; once linked, the ATO pre-fills your tax return with data from employers, banks, health funds, government agencies, and increasingly from sharing economy platforms
• Payment summaries / income statements: From 1 July 2019, employers report PAYG information directly to the ATO through Single Touch Payroll (STP) - your employer no longer needs to give you a group certificate; your income statement is available in myGov from late July; the ATO auto-populates salary and tax withheld
• Bank interest statements: Your bank(s) report interest earned directly to the ATO; verify the pre-filled amount is correct; add any interest not pre-filled
• Centrelink and government payments: Newstart/JobSeeker, parenting payment, and most other Centrelink income is pre-filled; government parental leave pay (paid via Centrelink) is assessable income
• Health insurance information: Your private health insurer reports premium and coverage data to the ATO; this is used to calculate the Private Health Insurance rebate adjustment; have your membership certificate available if the pre-filled data looks incorrect

---

Australian residents must declare all income from anywhere in the world. The ATO pre-fills many income items, but the responsibility for accuracy and completeness is yours.

• Salary and wages: From your employer's STP reporting - verify the gross salary, tax withheld, and employer super contributions are correct; if you had multiple employers in the year, each will have a separate income statement
• Interest from bank accounts: All accounts - savings, offset (if earning notional interest), term deposits; the ATO pre-fills most but verify against your bank statements
• Dividends from shares and ETFs: Unfranked dividends, franked dividends, and the attached franking credit are all assessable; your ETF or share provider should give you an annual tax statement; the ATO pre-fills many dividends from Computershare and Link Market Services (share registries)
• Rental income: All gross rental income from investment properties (including Airbnb short-term rental); the ATO receives Airbnb and Stayz data; do not omit short-term rental income
• Capital gains: From selling shares, ETFs, property, or other assets during the income year; not pre-filled (you calculate and enter); include date acquired, date sold, proceeds, cost base, and whether the 50% CGT discount applies (held 12+ months)
• Government payments: JobSeeker, parenting payment, youth allowance, disability support pension - all assessable; declared on your Centrelink income statement which is pre-filled
• Foreign income: Salary from overseas work, foreign dividends, rental income from overseas property - all must be declared; a foreign income tax offset (FITO) may apply if you paid tax overseas on the same income

---

Deductions reduce your taxable income. The key principle: you must have incurred the expense, it must relate directly to earning your income, and you must be able to substantiate it. The ATO's pre-fill does NOT include deductions - you must enter them manually.

• Work-related expenses: Tools and equipment, uniforms and protective clothing, professional memberships, self-education in your current role, phone and internet (work portion), home office (67c/hr fixed rate method requires full-year hours log)
• Car expenses: 88c/km for up to 5,000 business kilometres (no receipts required but log of trips required) OR logbook method (full 12-week logbook, actual costs, apply work % to total running costs)
• Income protection insurance premiums: Policies held outside super - fully deductible; enter under 'D11 - Other deductions'
• Tax agent fees: Last year's tax preparation fees - enter this year (deductible when paid, not when the return is for); also deductible: amounts paid for tax advice and lodgement assistance
• Charitable donations: To Deductible Gift Recipients (DGRs) of $2 or more; verify DGR status on the ATO's ABN Lookup; some charities pre-fill in myTax
• Investment expenses: Interest on money borrowed to buy income-producing investments (shares, investment property); portfolio management fees; financial advice fees for investment-related advice (not general personal financial planning advice)

---

Most Australian employees can lodge their tax return themselves through myTax - it is free, pre-filled, and straightforward. A tax agent is worth the cost in more complex situations.

• Do your own return (myTax) when: You have a simple return (one employer, some bank interest, no rental property, no significant investments); the ATO pre-fills everything and you just review, add deductions, and submit; myTax is available from 1 July each year; the ATO releases pre-fill data progressively from late July
• Use a tax agent when: You have investment properties with complex deductions; you have shares with capital gains requiring CGT calculations; you have multiple income sources including business, overseas income, or substantial side hustle income; you have had a complex life event (divorce, inheritance, redundancy); you have made a dispute or objection with the ATO
• Tax agent lodgement deadline: If you use a registered tax agent, the lodgement deadline is extended well beyond 31 October - typically to 15 May of the following year (e.g., 2024–25 returns lodged by a tax agent can be due 15 May 2026); this is a significant benefit for complex returns
• Tax agent fee cost-benefit: A simple individual tax return costs $100–$200 with a registered tax agent; for a complex return with investment property and shares, $300–$600; the agent fee is deductible next year; for many Australians with complex affairs, a good tax agent finds significantly more deductions than the cost of their fee
• H&R Block, TaxBanter, and online agents: Several national tax preparation chains (H&R Block, Etax online, TaxReturn.com.au) offer competitive rates; ensure you use a REGISTERED tax agent (check ATO's Tax Practitioners Board (TPB) register) - only registered agents can legally charge fees for tax return preparation
• Self-education as a tax deduction for the return itself: Tax return preparation fees, tax advice, and even the cost of tax-related seminars or books are deductible under Div 25 - the fee for getting the return done is itself tax deductible (in the following year)

---

Missing deadlines, failing to declare ATO-matched income, and common deduction errors are the three most common causes of ATO follow-up. Knowing what to expect prevents surprises.

• 31 October lodgement deadline: Self-lodged tax returns must be submitted by 31 October; if you miss this, the ATO may apply a Failure to Lodge (FTL) penalty starting at $330 for the first 28 days and increasing; if you are using a tax agent, engage one before 31 October to access the extended deadline
• ATO data-matching: The ATO receives data from employers (STP), banks, share registries, health funds, Centrelink, state revenue offices, AUSTRAC (foreign money transfers), and increasingly sharing economy platforms; if you omit income that the ATO has pre-filled data for, the return will be automatically reviewed or amended; non-disclosure after ATO data-matching = 75–90% shortfall penalty
• Amended tax returns: If you lodge and realise you have made an error, you can amend your return online through myTax (up to 2 years after lodgement for individuals) or contact the ATO; the ATO can amend your return up to 2 years from assessment date (4 years for business taxpayers)
• The ATO's data-matching for 2024–25: Including: employer STP data; financial institution interest; share dividends from major registries; Medicare/private health fund data; Centrelink payments; superannuation contributions; real estate rental income (increasingly); sharing economy platforms (Airbnb, Stayz, Uber, DiDi, Airtasker - progressively expanded)
• Common mistakes to avoid: Claiming entire phone/internet bill without work apportionment; claiming clothing that is not a registered uniform or occupation-specific; claiming commuting as a work trip; forgetting to declare interest on multiple bank accounts; omitting Airbnb income; claiming capital losses without declaring the capital gain from the same asset; not claiming the CGT 50% discount on assets held 12+ months
• Refund timing: If your return is in order, the ATO typically processes refunds within 2 weeks of lodgement for online myTax returns; complex returns or those flagged for review take longer; do not spend your anticipated refund before it arrives - the ATO sometimes adjusts claimed deductions during processing

---

Key dates: 1 July 2025 - tax return period opens; late July 2025 - ATO pre-fill data available; 31 October 2025 - self-lodgement deadline; 15 May 2026 - registered tax agent extended deadline. If you cannot lodge by 31 October, contact the ATO before the deadline to request a deferral (they often grant one with a phone call or online request).

Tax-free threshold: $18,200 (Australian residents); with Low Income Tax Offset (LITO) the effective tax-free amount rises to approximately $20,542; with Low and Middle Income Tax Offset (LMITO) - expired after 2021-22, no longer available in 2024-25. The ATO automatically applies LITO in calculating your tax payable.

Private Health Insurance (PHI) rebate tier levels (2024-25): Singles: Base tier (under $93,000) - 24.608% rebate; Tier 1 ($93,001–$108,000) - 16.405%; Tier 2 ($108,001–$144,000) - 8.202%; Tier 3 (over $144,000) - 0%. If your income is above the base tier and you received a base tier premium rebate through your insurer, you must repay the difference in your tax return.

Medicare Levy Surcharge (MLS): 1% on income over $93,000 (single) or $186,000 (couples) if you do not hold appropriate private patient hospital cover for the full year. If you held PHI for part of the year, the MLS applies pro-rata for the months without cover. The MLS is automatically calculated in myTax based on your income and PHI data.

Substantiation rules for deductions: Items over $300 require written evidence (receipts, invoices). Items under $300 can be claimed without receipts but you must still have incurred the expense and be able to explain it. Car expense claims (cents per kilometre) and laundry ($1 per load, $0.50 for small items) do not require receipts but do require you to record the number of trips/loads claimed. Keep all tax records for 5 years from lodgement.

---

Join Roopon today for exclusive member discounts plus FREE included prize-draw entries per your plan and published campaign terms.

Join ROOPON Now