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February 2017

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Tax Free Threshold

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The first $18,200 of your yearly income isn’t taxed.
This is the tax-free threshold.
By claiming this, you reduce the amount of tax that the tax department takes from your pay during the year.

When you start a job, your employer will give you a Tax file number declaration to complete.

On this form, you answer Yes to question 8 – “Do you want to claim the tax-free threshold from this payer?”

As a quick break down, the $18,200 tax-free threshold is equivalent to:
• $350 a week
• $700 a fortnight
• $1,517 a month

So just remember tho, you can only claim this for your main job – ie the job where you earn the most. Yes that’s right the ATO always goes for the highest amount. 
And if your taxable income exceeds the tax-free threshold you only pay tax on the excess.

And… If you have two jobs and earn over the threshold make sure you only tick the box for one job… or else you will have to pay the ATO!