To tick or not to tick that is the question!
We often get asked this question here at NKT Tax, as many people are confused when it comes to what the tax-free threshold is, and if they should be claiming it. So let’s break it down into something easy to digest.
When it comes to Australian resident taxpayers, the tax-free threshold roughly works out to be around $350 a week (or put another way the first $18,200 you make from all sources is tax-free). If you make less you normally won’t pay tax.
At the start of every job, you will be handed a form and asked to decide if you want to claim the tax-free threshold. The answer will determine how you are taxed.
Where people get confused is how and when to claim it.
Hot tips for the tax-free threshold:
- Claim the tax-free threshold on your primary income source (usually the one that pays you more)
- Be sure when taking on jobs from other employers that you dont claim it more than once.
You can only claim the tax-free threshold from one job as claiming from more than one will usually result in incorrectly taxed income and a nasty surprise when you are given a bill for the ATO at tax time.
Need help? Connect with us here at NKT Tax and let us make the process simple.