When we were kids, all we wanted to be was grown up so we could be free to do what we wanted. We were ecstatic when we graduated school, got our first job, and were absolutely pumped when we got our first payslip! FREEDOM!
We ripped open that envelope to see how much we were getting for those 7 gruelling days of work – but SHOCK HORROR! Why the hell is some missing?! WHAT ON EARTH IS TAX?!
Tax is a part of life – a part that we may or may not have been warned about before we entered the world of adulting.
So here’s the lowdown… just in case you still have no idea!
What are Taxes for?
We work – we get paid – we get taxed. Tax is that part of your wage that you have to pay the government. The government uses that money to pay for things such as health care, education, roads, critical infrastructure, footy stadiums (pick your code), rail networks, public transport, roadworks, rubbish removal, sewerage – even the water that comes out of your taps!
How does Tax work? When do I start paying Tax?
First, you get a Tax File Number (TFN). This is the number the Australian Taxation Office (ATO) identifies you by. Your personal information (name, date of birth etc) is recorded with this number, along with all of your income & tax info.
Next comes a job, earning income!
When do I start paying tax & what is the tax-free threshold?
If you earn under a certain amount a year ($18,200) you don’t get taxed. (This is called the ‘Tax-Free Threshold’) As soon as your income goes over that figure, this is when you start paying tax. The tax you’re charged is calculated based on what you earn – the more you earn, the more you’re taxed.
Resident tax rates 2021–22
|Taxable income||Tax on this income|
|0 – $18,200||Nil|
|$18,201 – $45,000||19 cents for each $1 over $18,200|
|$45,001 – $120,000||$5,092 plus 32.5 cents for each $1 over $45,000|
|$120,001 – $180,000||$29,467 plus 37 cents for each $1 over $120,000|
|$180,001 and over||$51,667 plus 45 cents for each $1 over $180,000|
Individual income tax rates | Australian Taxation Office (ato.gov.au)
Click Here for more info on Tax Free Thresholds
Why understanding Tax is important
Paying taxes as an Aussie isn’t optional. And intentionally trying to do the dodgy won’t end well.
In Australia we self-assess our taxable position in our Tax Return each year. This means it’s our obligation to tell the ATO, how much we earned and what our expenses are and how much tax we are owed back, or need to pay.
Understanding taxes, believe it or not, will actually save you money! Depending on what your job is, and what you pay for throughout the year, there are certain things that you can claim on, (called deductions), which means you get some money back! It’s like a little mid-year BONUS (even though it’s actually your money you’re getting back). So what are Deductions? Deductions can be things like work related travel, uniforms, courses & education, even tools you’ve had to buy for your job.
Check out our Individual Tax Tips for different occupations HERE
How do I get my Money back? How do I lodge my Tax Return?
Every year you lodge a Tax Return. You can do this from 1 July to 31 October every year.
Most people though, if we’re honest, don’t really like doing their Tax Returns. It’s when everyone is supposed to tell the government how much they’ve earnt, what they’ve spent their money on & it usually involves paying an Accountant to go through every single bit of paperwork on the planet, asking you all sorts of questions, like “what did you spend $33.20 on, on the 3rd of October last year & did you keep the receipt?” Sounds like fun doesn’t it? Let’s take a few steps back & talk about how it all works…
Tax time happens at the end of the ‘Financial Year’. The financial year starts on the 1st of July and ends on the 30th of June. Through this year, you pay taxes every pay, and your employer keeps track of everything you’ve earnt & how much tax you’ve paid. When tax time rolls around, you’ll get a document called an ‘Income Statement’, also known as Payment Summary and Group Certificate – which is pretty much a report on what those numbers are. You then take this document to an Accountant, along with any receipts that are work-related or tax deductible & the accountant then sends that information off to the ATO (Australian Taxation Office) From there they will decide if you’ve paid too much tax or not. If the answer is yes.. YOU GET MONEY BACK! This process can be pretty drawn out and intimidating and expensive.
But Not Anymore!
One Click Life has changed all of that. We have completely changed the way Tax Returns are done – you can now lodge your Tax Return online with a computer or even on our phone app! You don’t need to make an appointment; you don’t need to keep track of every single thing you’ve spent money on or stockpile a shoebox full of receipts.
How to submit your Tax Return online with One Click Life? You can simply create an account on our website or phone app and then follow the 4 simple steps.
It’s as simple as 1, 2, 3, 4!
1. PERSONAL DETAILS
When you enter your TFN, our website ‘talks’ directly to the ATO & your information is automatically pre-filled. You also add your Health Insurance details here.
This is where you select your occupation. Everything else automatically updates from the ATO including that report from your boss about your earnings.
This is where the magic happens. This is where you can maximise your tax refund. Based on your occupation we will suggest a list of items that are normally deductible for your occupation. All you have to do is click the ‘Add’ button to add deductions that apply to you.
#taxhack To make things even easier, we’ve also put a ‘Search Bank Transactions’ button at the top of the page, which means we’ll find all claimable transactions without you having to dig around for receipts. It’s all safe, secure & protected. (We’ll never store your bank details or personal transactions)
Based on all the info in the previous steps, we’ll show you your estimated tax refund. This is how much you’ll get back! BOOM! Now, at this stage, if there’s anything you’re unsure about or if you’ve realised you’ve forgotten to put some info in, you can go back & update prior to hitting lodge.
If everything looks good & you’re ready to go, just hit LODGE!
CONGRATULATIONS! You’ve just completed your online Tax Return! We send a message to the ATO, tell them how much money to give back to you, and in a week or two, the funds will be sitting in your account.
How easy is that?!
Need help along the way?
You can chat with our Numbers Geeks (accountants) at any stage of your lodgement (there are little speech bubbles next to each section along the way). You can also give us a call on 1300 707 117 or email us [email protected] if you need some advice or help.
There’s no need to be nervous, no need to stress out or feel intimidated by all the numbers & tax jargon.
Let One Click Life help with the unavoidable part of adulting, that is TAX. We’ve got you covered 😉