Payers, such as employers, are vital to withhold tax from the payments they make to you and send those expenses to us regularly. When you lodge your tax return at the end of the financial year, you will be permitted to a credit for the amount of tax that has been withdrawn from your pay. This amount is shown on your payment summary.
Your payer works out how much tax to withhold based on information you provide in your Tax file number declaration and Withholding declaration.
Withholding rates are planned on the basis that, if your pay and circumstances remain reliable throughout the year, you may be entitled to a small refund when you complete your tax return at the end of the financial year.
This system is called pay as you go (PAYG) withholding.
When you do your tax return, you can declare certain deductions for some expenses, such as work-related expenses.
To claim a work-related deduction it must be directly related to your job – for example, if you have to buy your own protective clothing to do your job.
Some basic rules are:
• it must be directly related to your job, not for use at home
• you cannot claim a deduction if your employer has paid for it
• you must have the written records, such as revenue
• you need to declare it in the same financial year that you complete the purchase.