In the federal Budget 2022–23, the Australian Government said it had made “permanent tax cuts of up to $2,565 for individuals” for 2022/23. Income tax, like most taxes, is used as a form of revenue generation for governments so that they can reinvest this back into infrastructure, social security payments and public services such as health, education and defence. Visit our Tax Hub Why do we pay income tax? If you are self-employed, you will need to set this money aside and pay it yourself.Įither way, after the end of the financial year you can then lodge a tax return to the ATO to either get a tax refund (if you have paid more tax than required), or to pay any extra tax that you may be liable for. If you are an employee, your employer will normally take your income tax out of your pay and send it to the Australian Taxation Office (ATO) on your behalf throughout the year. It is calculated based on how much you earn within a financial year (1 July to 30 June), and any deductions or offsets you can claim. Income tax is a type of tax you pay to the government on the income earned from a job or your investments. So, what is income tax and how much are you required to pay? What is income tax? As long as you’re earning income in Australia or from overseas, you’ll potentially be liable to pay income tax to the Australian Government. Interested in what income tax bracket and rate will apply for you this financial year? Tuan Duong, Duo Tax Founder and Principal, explains income tax brackets for 2022.Īfter the end of the financial year, you can lodge a tax return to the ATO to either get a tax refund – if you have paid more tax than required – or to pay any extra tax that you may be liable for.
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