Claiming the Tax-Free Threshold: Getting It Right (Sep 24 Tax Update)

Relevant For:

Australian taxpayers with multiple income sources or those starting new employment.

Key Points:

• Claim the $18,200 tax-free threshold from your main income source to avoid excess withholding.
• Multiple claims on the threshold could lead to a tax debt if annual income exceeds $18,200.
• Keep track of total income and withheld tax to avoid surprises at tax time.
• For sole traders or additional income, consider setting aside tax or using PAYG instalments.

Full Article:

As an Australian resident for tax purposes, you’re entitled to a tax-free threshold of $18,200 per year, meaning you won’t be taxed on the first $18,200 of income you earn from any source.

However, navigating this can be tricky if you have multiple jobs, change employers, run a side business, or receive government payments.

It's crucial to understand how to claim the tax-free threshold correctly to avoid unexpected tax bills.