Australia Tax Refund Scheme

In Australia, the tax system is geared so most employees receive money through the Australia tax refund scheme.

How does it work?

The Australia tax refund scheme requires employers to withhold (or deduct) an amount of tax from each pay and remit that tax to the tax office each quarter.

At the end of the year, the employer issues a PAYG Payment Summary, detailing the amount of income earned and the amount of PAYG tax withheld (deducted) from the gross income for the year. It is this amount withheld that forms part of the Australia tax refund scheme..

When submitted to the tax office with the annual income tax return, under the Australia tax refund scheme a refund is calculated from the net or "taxable" income and the amount of tax withheld.

Put simply, if you have had more PAYG tax withheld from your pay than you needed, you get a refund through the Australia tax refund scheme.

Copyright 2014. My Tax Zone.