Why you may receive a tax bill

Common reasons you may receive a tax bill and action you can take to avoid a tax bill next income year.

Your tax assessment

The statement we issue that explains how your tax assessment is calculated is your notice of assessment (NOA). Your NOA will show if you will receive a refund or have a tax bill.

If you have a tax bill to pay, your NOA will include your payment advice and due date.

Reasons you receive a tax bill

You may receive a tax bill (amount you need to pay) for any of the following reasons:

What to do if you have a tax bill

If you receive a tax bill, you will need to pay it by the due date on your notice of assessment.

If you can’t pay on time, it’s important to take action quickly while your debt is still manageable.

You may be eligible to set up your own payment plan, tailored to your circumstances.

If you’re still unsure why you have a tax bill or are having difficulty paying, contact us or speak with your registered tax agent.

Regardless of your situation or circumstances, personal crisis support is available.

If you’re experiencing financial difficulties or serious hardship and you’re finding it hard to lodge or pay your tax, we have support available.

How to prevent a tax bill

Most people who earn income as employees have tax payments made on their behalf throughout the income year through pay as you go (PAYG) withholding. These amounts help you to meet your annual tax obligations.

However, if you earn income that does not have tax withheld or does not have enough tax withheld, the following actions could help you prevent a tax bill:

Increasing tax withheld from payments

You may be able to vary your rate or amount of withholding to make sure that the amount withheld during the income year meets your end-of-year tax liability. You can ask one or more of your payers to increase the amount of tax they withhold.

If your circumstances warrant a withholding variation, you will need to work out if the variation is:

Voluntary entry into PAYG instalments

If you are new to business, or you think you will earn business and investment income over the entry thresholds, we recommend voluntary entry into PAYG instalments. You can arrange voluntary entry to PAYG instalments in ATO online.

If you lodge a tax return with instalment income above the entry threshold in your latest tax return we will automatically enter you into the PAYG instalments system. We will let you know when you have entered the PAYG instalments system.

Tax prepayments

You can make tax prepayments any time and as often as you like to make it easier for you to manage your tax. We will hold the prepaid amounts you make towards your expected bill unless you, or your agent, request a refund.

How much tax to set aside

Use our simple tax calculator to estimate how much tax you are likely to owe.

You can then plan how much money to set aside or pay through PAYG instalments or prepayments in future income years.

Last modified: 24 Jul 2023
QC 54461

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