Tax Invest Accounting director Belinda Raso said there were a few different reasons Aussies were being hit with ATO tax bills. (Source: TikTok\/@taxinvestaccounting\/@marnieclymo) <\/p>\n
Many Australians have been left blindsided after lodging their tax returns<\/a> and finding that, rather than getting a refund, they actually owe money to the Australian Taxation Office (ATO)<\/a>. An Australian tax accountant said many workers<\/a> were running into the \u201csame problem\u201d due to the way the payroll system works.<\/p>\n Australians have flooded social media to share the outcome of their 2025 tax returns<\/a> since the start of the new financial year. While some have been \u201cboasting\u201d about their hefty tax refunds<\/a>, others have shared their shock at being hit with a tax bill<\/a>.<\/p>\n Tax Invest Accounting director Belinda Raso told Yahoo Finance she was seeing more people getting tax bills<\/a> because they worked multiple jobs<\/a> and no longer had the \u201cbuffer\u201d of the $1,500 low and middle income tax offset<\/a>, which ended on June 30, 2022.<\/p>\n RELATED<\/p>\n \u201cThe way our payroll system works is even if you do the right thing and you tick not to claim the tax-free threshold<\/a> on your second job, that [job] is not withheld at enough,\u201d she said.<\/p>\n If you earned more than $45,000 in your first job, for example, you would already be in the 32 per cent tax bracket, including the 2 per cent Medicare Levy<\/a>.<\/p>\n \u201cWhen you tell your [second] employer not to claim the tax-free threshold, you’re actually going straight onto that first tax bracket, which is 16 per cent plus 2 per cent Medicare levy,\u201d Raso said.<\/p>\n \u201cBut if your first job is already $45,000, you need to be paying it at 30 per cent plus 2 per cent, so you are down 14 per cent and this is where people are getting tax bills.\u201d<\/p>\n Raso said Aussies in this position should either ask their employer to withhold the additional tax, put it away themselves during the year, or not claim the tax-free threshold on their main job. Otherwise, it’s likely to happen again this year.<\/p>\n There were 963,100 multiple job-holders in March this year, the latest ABS data found, representing 6.5 per cent of all employed people.<\/p>\n Raso said she thinks changes to the payroll system would mean “less disgruntled Aussies” who end up with a tax debt, despite thinking they are doing the right thing.<\/p>\n Do you have a tax story to share? Contact tamika.seeto@yahooinc.com<\/p>\n If you have a HECS-HELP debt<\/a>, Raso said you\u2019ll need to let your employer know about it, or you could end up with a tax debt.<\/p>\n If you have reportable fringe benefits or salary sacrifice, this could also be a reason you get a tax debt.<\/p>\n Story Continues <\/p>\n That\u2019s because HECS repayments<\/a> are calculated with salary sacrifice added back in and reportable fringe benefits are \u201cgrossed up\u201d.<\/p>\n If you work multiple jobs<\/a>, your combined income may also be enough to push you over the HECS repayment threshold and mean you get a tax debt. The threshold for the 2025 financial year was $54,435.<\/p>\n \u201cIf you have two employers, and if you don’t reach that HELP debt limit, even though they know you’ve got a HELP debt, it won’t come out of your pay,\u201d Raso said.<\/p>\n \u201cBut then, added together, both of them will get you over that threshold and you will end up with the tax debt.\u201d<\/p>\n Raso said the Medicare Levy Surcharge<\/a> can be another reason you receive a tax debt. Your employer withholds the Medicare Levy, but not the surcharge.<\/p>\n For the 2025 financial year, the surcharge applies to singles earning $101,001 or more and families earning $202,001 or more who don\u2019t have hospital health insurance cover.<\/p>\n You can also get a tax bill if you earned other income during the year. That could include from side hustles, bank interest<\/a>, investments, rentals and capital gains tax.<\/p>\n If you receive a tax bill<\/a>, you need to pay it by the due date on your Notice of Assessment.<\/p>\n If you can\u2019t pay on time, you can ask the ATO to set up a payment plan and break your bill down into smaller amounts.<\/p>\n If you have an outstanding amount owing to the ATO after the due date, you will be charged a general interest charge.<\/p>\n It is currently 10.78 per cent annually and compounds daily, even if you are on a payment plan.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n