Wondering how much tax you’ll get back this year? Your tax refund amount depends on your total income, tax already withheld by employers, and the deductions you can claim. In Australia, your annual income (or gross annual income) is the total amount you earn before any deductions, and is a key figure in tax calculations. Your tax return is calculated by subtracting eligible deductions from your total income to determine your taxable income. The final amount of tax payable is calculated by adding any additional taxes due and subtracting any pre-paid taxes or withheld amounts.​

Most Australians receive a refund within two weeks of lodging their return online, though the dollar amount varies significantly based on individual circumstances. The amount of tax you get back is based on the information you provide about your income, tax withheld, and deductions. Some taxpayers receive several thousand dollars back, whilst others discover they owe money to the ATO.​

Understanding Your Tax Refund in Australia

Your tax refund represents the difference between the tax you’ve already paid throughout the financial year and your actual tax liability. Employers are required to withhold a certain amount of tax from your wages for tax obligations. Providing your tax file number to your employer ensures the correct amount of tax is withheld from your wages. Your status as an Australian resident for tax purposes affects your eligibility for the tax-free threshold and other benefits.

If you have paid too much tax, you will receive a tax refund when you lodge your end of year tax return. However, you may owe money to the ATO if the total tax deducted from your income throughout the year was insufficient to cover your actual tax liability. This often surprises taxpayers who assume they’ll always receive money back. Tax offsets can also increase the amount of your refund.

Consider two teachers earning similar salaries. One receives an $1,800 refund after claiming a new laptop and professional development courses, whilst another owes $750 because they had two jobs and incorrectly claimed the tax-free threshold from both employers. Only those entitled to certain tax offsets or deductions will see higher refunds. The difference comes down to deductions claimed and how much tax was withheld.​

How to Calculate Your Tax Refund: The Simple Formula

Calculating your tax refund involves three straightforward steps that show whether you’ll receive money back or owe the ATO.

To simplify this process, you can use a tax return calculator, which helps estimate your refund quickly and easily. The calculator works by analyzing your income, tax withheld, and deductions to provide an estimated tax result. Keep in mind, the estimated tax outcome depends on the accuracy of the information you enter.

Step 1: Calculate Your Taxable Income

Your total taxable income is determined by your gross annual income, which includes all earnings before tax and deductions—such as salary, bonuses, and fringe benefits. Start by adding every pound you earned during the financial year from employment, investments, rental properties, government payments, and any other source. Salary sacrifice arrangements and fringe benefits may also affect your gross annual income and taxable income. Other factors, such as allowances or non-cash benefits, can also influence your taxable income.​

Next, subtract your eligible deductions. Expenses you can claim as deductions include work-related costs and home office expenses. This calculation gives you your taxable income, which is the figure the ATO uses to determine how much tax you should pay.​

Step 2: Determine Your Tax Payable

Tax rates in Australia apply to each income year, so it’s important to use the correct rates for the relevant income year when calculating how much tax you will get back. For example, tax rates for the 2025–26 income year may differ from previous years.

The Australian income tax system uses progressive tax rates, meaning a higher rate applies to higher income brackets. Only certain types of income are subject to income tax, such as employment income, investment income, and bonuses. For each dollar you earn above a tax bracket threshold, a higher rate of tax is applied.

Taxable Income	Tax Rate	Tax on This Income
$0 – $18,200	0%	Nil
$18,201 – $45,000	16%	16c for each dollar over $18,200
$45,001 – $135,000	30%	$4,288 plus 30c for each dollar over $45,000
$135,001 – $190,000	37%	$31,288 plus 37c for each dollar over $135,000
$190,001 and over	45%	$51,538 plus 45c for each dollar over $190,000

The lowest tax bracket rate in Australia will reduce from 16% to 15% starting July 1, 2026, providing slight relief for middle-income earners.

After calculating your income tax for the relevant income year, add the Medicare levy of 2% (most Australians pay this), plus any Medicare levy surcharge if applicable. For example, if you have $60,000 in taxable income, you would pay $8,137 in income tax plus a $1,200 Medicare levy, totalling $9,337 in tax payable for that income year.

Step 3: Compare Tax Payable to Tax Withheld

Check your income statement (previously called a payment summary) or recent payslips to find out the amount of tax your employer has already sent to the ATO on your behalf. To use a tax refund calculator, users need to have details of their income and tax paid, which can be found on their Income Statement or pay slip. The calculator provides an estimated tax refund or liability based on the information you provide about your income and tax withheld.​

Subtract your total tax payable from the amount of tax already withheld. If you paid $15,000 throughout the year but only owed $9,337, you’re getting $5,663 back. If you only paid $8,000, you’ll owe the ATO $1,337.​

Factors That Determine Your Tax Refund Amount

Factors determining your tax refund amount include total income, claimed deductions, tax credits, multiple jobs or income sources, and other factors such as specific loans or exemptions. Understanding these variables helps explain why your neighbour might receive $4,000 whilst you only get $400, even on similar incomes.​

Your total income affects which tax bracket you fall into and triggers additional obligations like Medicare levy surcharge or Higher Education Loan Program (HELP) repayments. Some taxpayers may be eligible for an exemption from the Medicare levy, depending on their circumstances. Investment income from share dividends or rental properties increases your taxable income, potentially pushing you into higher tax brackets.

Deductions for work-related expenses can increase your tax refund by reducing your taxable income. Every pound you claim in eligible deductions reduces your taxable income by that amount, lowering the tax you owe. Someone claiming $5,000 in work expenses saves $1,500 in tax if they’re in the 30% bracket.​

HELP and HECS debts create unexpected refund reductions for many Australians. Compulsory repayments kick in once your income exceeds $54,435 (2025-26 threshold), with repayment rates increasing as income rises. Having a trade support loan, such as the Australian Apprenticeship Support Loan, can also affect your tax refund due to compulsory repayments. One taxpayer reported expecting a $700 refund but instead owing $2,500 after interest income pushed them into a higher HECS repayment bracket.​

Multiple jobs frequently cause problems when employees claim the tax-free threshold from more than one employer. The $18,200 tax-free threshold should only be claimed from your primary employer. Claiming it from two jobs means insufficient tax is withheld throughout the year, resulting in a tax bill rather than a refund.

Common Tax Deductions to Increase Your Refund

You may be able to reduce your tax payable by claiming all eligible deductions, provided you are entitled to claim them. Work-related expenses form the largest category of deductions for most employees, covering costs you incurred to earn your income. Only certain expenses are subject to deduction rules set by the ATO, so it’s important to check your eligibility.

Vehicle and travel expenses for work-related travel (not your regular commute) can be claimed using either the cents per kilometre method or logbook method. Tools and equipment purchased for work are deductible, either immediately if under $300 or via depreciation for more expensive items.

To maximise your tax deductions in Australia, claim home office expenses if you work from home. The ATO provides several methods for calculating these deductions, including a fixed rate per hour or actual costs for dedicated work spaces. During periods of remote work, these deductions can add hundreds of pounds to your refund.

Uniforms, protective clothing and laundry costs are claimable when your employer requires specific clothing. Self-education expenses qualify when the course relates directly to your current employment and improves your skills.

Keep receipts for all work-related expenses, and electronic copies are acceptable. The ATO requires documentation for five years from your lodgement date. For small claims totalling under $300, receipts may not be required, but you must still be able to demonstrate the expense was genuinely incurred.

A laptop purchased in January 2025 for $1,800 and used 50% for work, with an effective life of three years, would generate a first-year depreciation deduction of approximately $297 using the diminishing value method. Whilst this seems modest, combining multiple deductions creates substantial refund increases.

Professional subscriptions, union fees, and income protection insurance premiums are commonly overlooked deductions that require minimal documentation. Donations to registered charities and the cost of preparing your tax return (if using a tax agent) also qualify.

In addition to deductions, you may also be entitled to tax offsets, which can further reduce your tax payable and increase your refund.

Using a Tax Refund Calculator

A tax return calculator requires users to input their income and tax withheld to provide an estimated tax refund. The calculator works by analysing your entries and instantly estimating whether you’ll receive a refund or owe money, helping you plan your finances before lodging. The result is based on the information you provide, so accuracy depends on the details you enter. The ATO website offers official tax return calculators and resources for estimating your tax refund.

Tax calculators can help users determine if they are likely to receive a refund or need to pay more tax based on their inputs. Basic calculators only require your total income and tax withheld, but these provide rough estimates that may differ significantly from your actual refund.

Users can refine their estimated tax refund by including additional information such as deductions and other income. Adding details about work expenses, HELP debts, Medicare levy surcharge status, and multiple income sources dramatically improves accuracy.

Tax return calculators are updated annually to reflect the latest tax rates and thresholds. Ensure you’re using a calculator set for the correct financial year, as rates and thresholds change regularly.

The ATO’s Income Tax Estimator provides detailed estimates directly connected to your tax file, whilst registered tax agent calculators often include automatic optimization for deductions. Someone who enters $70,000 income and $16,000 tax withheld might estimate a $3,000 refund, but if they forgot to account for their HELP debt, the actual refund could be just $800 due to compulsory repayments.

When You’ll Owe Money Instead of Getting a Refund

Not everyone receives a refund at tax time. You may owe money to the ATO if the total tax deducted from your income throughout the year was insufficient to cover your actual tax liability. This situation catches many taxpayers off guard, particularly those with multiple income sources.​

Common causes include working two or more jobs where you claimed the tax-free threshold from each employer, resulting in under-withholding. In these cases, a higher rate of tax may apply to your additional income or if the tax-free threshold is incorrectly claimed, increasing the amount you owe at tax time. Side income from freelancing, contracting or cash jobs is subject to additional tax at the end of the year, as it often has no tax withheld, creating a gap between what you’ve paid and what you owe.

Investment income from shares, rental properties or interest can push you into higher tax brackets or trigger HELP repayments you hadn’t accounted for. A recent Reddit discussion highlighted a taxpayer who earned modest employment income but $15,000 in unreported cash jobs, facing a substantial tax bill.​

If you don’t lodge a tax return when required, you could face several consequences, including penalties from the ATO. Beyond the tax owed, you’ll face additional interest charges and potentially payment difficulties.​

The ATO offers payment plans for taxpayers who cannot pay their full tax bill immediately. Arranging a plan quickly minimises additional interest and shows good faith, preventing more serious enforcement action.

Tax Return Lodgement Deadlines & Refund Timeframes

Tax returns must be completed and lodged no later than 31 October following the end of the most recent tax year. For the 2025-26 financial year (ending 30 June 2026), the deadline is 31 October 2026 for individuals lodging their own returns.​

Using a registered tax agent extends this deadline significantly, often into March or even May of the following year. This extension provides extra time to gather documentation and ensure accuracy without penalty.

Lodging your tax return online is often the fastest and easiest way to submit your financials and receive a refund. Most refunds are issued within two weeks of lodging a return. Online lodgement through myTax or registered tax agent software processes much faster than paper returns, which can take six to eight weeks.​

Failure to lodge a return can result in ATO penalties, including a Failure to Lodge (FTL) penalty, which accrues at $330 per 28 days overdue. These penalties compound quickly, turning a small tax bill into a significant debt. Missing deadlines also delays your refund and may trigger ATO reviews of previous years’ returns.​

For the latest information on lodgement deadlines, online submission options like myTax, and helpful resources, visit the ATO website.

Fast-Track Your Tax Refund

Most taxpayers receive refunds within the standard two-week timeframe, but faster options exist for those who need money urgently.

Tax Refund Advance allows access to up to $1,000 of your tax refund within minutes instead of weeks. Only those entitled to a refund can access advance or same-day refund services. These services, offered by some registered tax agents, provide immediate funds based on your calculated refund, with the service fee deducted when your actual refund arrives.​

Tax Today offers same-day tax refunds for prepared returns. This service works similarly to refund advances but can provide the full refund amount on the same day you lodge, though fees apply for the expedited access.​

Most refunds are issued within two weeks of lodging a return online. For most taxpayers, the standard online lodgement process through myTax or a registered tax agent provides refunds quickly enough without additional fees. Direct deposit ensures the fastest payment, with the ATO indicating a shift toward requiring direct deposit for 2026 refunds to speed up processing times.​

Using a registered tax agent can help ensure you receive the maximum refund possible. Professional tax services can help you achieve a better refund by identifying all deductions and tax offsets you are entitled to claim. Whilst agents charge fees, they often identify additional deductions that more than offset their cost, and their expertise reduces the risk of errors that delay processing.​

Maximising Your Tax Refund

Consulting a tax professional can help ensure optimal deductions and accuracy in your tax return, often resulting in a better refund. Beyond professional help, several strategies can legitimately increase your refund without raising ATO concerns.​

Claim all eligible work-related expenses throughout the year, not just obvious ones. Equipment depreciation, professional development courses, industry publications, and tools all add up. Someone who claims $50 here and $100 there might accumulate $2,000 in deductions that save $600 in tax.

Prepaying deductible expenses before 30 June brings the deduction forward into the current year. Union fees, professional subscriptions and income protection insurance can often be paid annually in advance. This strategy increases your immediate refund whilst deferring next year’s deductions.​

Keep meticulous records using the ATO’s myDeductions app or spreadsheets. Electronic copies of receipts are acceptable. Photographing receipts immediately and storing them in cloud folders prevents the year-end scramble and ensures you don’t miss claimable expenses.​

Home office expenses remain one of the most under-claimed deductions. If you worked from home at all during the year, calculate your claim using the ATO’s methods. Even one day per week working from home generates meaningful deductions for electricity, internet, phone and equipment.

Using a tax agent will often ensure you receive the maximum refund possible, as their expertise can help you achieve a better refund. Registered agents understand current rules, identify deductions you might miss, and ensure compliance that prevents future ATO reviews. Their fees are tax-deductible in the following year, softening the cost.​

A sole trader who maintains organised records throughout the year, rather than scrambling in July, can easily claim $5,000 to $10,000 more in legitimate deductions than someone with poor documentation. The difference between a $500 refund and a $3,000 refund usually comes down to record-keeping and knowing what you are entitled to claim. Always ensure you only claim deductions and offsets you are entitled to, as this maximises your refund while staying compliant.

Frequently Asked Questions

How do I know if I’ll get a tax refund or owe money?

Compare the total tax withheld from your income (shown on your income statement) to your calculated tax liability based on your taxable income and deductions. You can use a tax return calculator to get an estimated tax refund by entering your annual income and gross annual income. If more tax was withheld than you owe, you’ll receive a refund. If insufficient tax was withheld, you’ll receive a bill from the ATO.​

What if I have multiple jobs?

Ensure you only claim the tax-free threshold from one employer, typically your primary job. Your total income from all jobs determines your tax bracket, and having multiple employers often results in under-withholding if not managed correctly. Providing your tax file number to each employer ensures correct withholding.​

Can I get a tax refund if I earn under $18,200?

Yes, if your employer withheld tax from your pay, you should receive a full refund since income under $18,200 is tax-free (provided you claimed the tax-free threshold). Someone earning $22,000 who had tax withheld on the full amount could receive approximately $2,000 back after claiming the threshold. Your eligibility for a refund also depends on your status as an Australian resident for tax purposes.​

How long does it take to receive my tax refund?

Most refunds arrive within two weeks of lodging your return online with direct deposit details. Paper returns take six to eight weeks, whilst returns requiring ATO review may take longer.​

What happens if I miss the 31 October deadline?

You’ll face Failure to Lodge penalties of $330 per 28 day period until you lodge your return. These penalties accumulate quickly and add to any tax you owe. Lodging late also delays your refund and may trigger ATO scrutiny.​

Do I need receipts for all my deductions?

Generally yes, though some claims under $300 total may not require receipts if you can demonstrate the expense was genuinely incurred. You must keep all documentation for five years from the lodgement date, as the ATO can request evidence during reviews.​​

Will my HELP debt reduce my tax refund?

Yes, compulsory HELP repayments are deducted from your refund once your income exceeds the repayment threshold (currently $54,435). Repayment rates range from 1% to 10% of your income depending on your earnings.​

Can refundable tax credits increase my refund beyond the tax I paid?

Yes, refundable credits can provide a refund greater than the tax you paid. Certain offsets like the Low and Middle Income Tax Offset (when available) can increase your refund beyond your withholding amounts.​

What factors can affect my tax refund?

Fringe benefits, salary sacrifice arrangements, and trade support loans can all impact your tax outcome for tax purposes. These components may increase your reportable income or affect your withholding, which in turn changes your estimated tax refund or liability.

Get Your Maximum Tax Refund Today

Ready to find out exactly how much tax you’ll get back? Our registered tax agents can help you achieve a better refund by preparing your return, identifying every eligible deduction, and ensuring you claim everything you are entitled to. We make sure you receive your maximum refund within weeks. Contact us today to lodge your tax return and access your refund faster, or use our comprehensive tax calculator to get an instant estimate of what you’re owed.

Don’t leave money on the table this tax season. Whether you’re expecting a refund or concerned you might owe money, professional guidance ensures accuracy, maximises your return, and provides peace of mind that your tax affairs are in order.