How Do I Estimate My Tax In Australia? 

How Do I Estimate My Tax In Australia? 

Our tax calculator is so easy to use that we’ve only got three fields for you to fill in to get your tax estimate. 
Gross income: this is your total taxable income for the year.
Tax withheld: check out your last pay slip to see how much tax has been withheld from your gross income by your employer.
Tax deductions: This is money you have spent to earn your income. 
There’s more on each of these topics below and a few exclusions, but firstly, let’s look at how to lodge an online tax return. 

Online Tax Estimate vs lodging tax online

There is a difference between estimating tax online and lodging tax returns online. An estimate is exactly that – an estimate of your tax return for the year. Often a tax calculator misses more specific tax returns items like;

  • The medicare levy surcharge,
  • Any temporary budget levy that the government might impose such as the current temporary budget repair levy,
  • Centrelink payments, and
  • Tax offsets such as the low to middle income tax offset.

In essence, you are getting a tax estimate – not a final tax position. 

There are online tax return websites that allow you to lodge your tax directly with the ATO. In our opinion the best one is One Click Life. One Click Life allows you to lodge your tax return directly with the ATO for only $99 which can be deferred to be paid from your tax refund so you are not out of pocket. Their online tax return system takes only minutes to register and lodge your tax return. Follow this link to see a video of it in action – here

Remember, an estimate doesn’t allow you to lodge a tax return with the ATO, you need to go to an online tax agent like One Click Life to lodge your tax refund. 

Gross income

Also known as taxable income, your gross income is the total amount of your earnings for the financial year including all the tax that your employer has withheld. At the end of the tax year on your last payslip in June, your will see a field called year to date gross income or total income or taxable income.

If you’re doing an estimate part way through the year, divide by how many months through the year we are, then time by 12 to get an estimate of your total gross income for the year.

Eg, at the end of September you want to a tax estimate for the year. Your payslip says $15,000 as your gross income.

$15,000 / 3 months = $5,000 per month

$5,000 x 12 months = $60,000 per annum

Enter in your gross income estimate for the year into the tax calculator.

Tax withheld

You’ll also need your payslip to work out your tax withheld. Next to the gross income there should be another field for year to date tax withheld. You’ll need this to know how much tax your employer has already withheld from your wages. 

If you’re trying to estimate your tax withheld for the whole year, you’ll need to follow the example above with tax withheld to estimate the year. 

Tax deductions

A tax deduction is something that reduces your taxable income. It is an expense that you’ve paid for in order to do your job or, earn your taxable income. 

For the ATO to allow an expense to be a tax deduction it has to tick three boxes. 

  • It has to be work related
  • You had to pay for it
  • You need to substantiate it (prove it)

10 common tax deductions are listed below to help you work out if you have any tax deductions:

  • Work uniforms,
  • Laundry,
  • Car expenses (cents per kilometre),
  • Mobile phone and internet expenses,
  • Working from home,
  • Tax agent fees,
  • Income protection insurance,
  • Donations, 
  • Self-education, and
  • Purchase of your tools of trade

When you enter in your tax deductions to the tax estimator it will automatically adjust your tax position and let you know your tax refund. For more tax tips, check out this blog

Once you have all the information in place, make sure you have selected the correct tax year in the tax calculator. 

If you want to take your tax estimate to a lodgement, you can do that using One Click Life.

About the author

As a national award winning Business Development Manager, entrepreneur and financial professional, Nathan Kerr’s difference comes from his desire to create fuss-free financial products and services for everyone and why he has created to consolidate commonly searched tax tables and calculators.

Tax calculators and tax estimates are used by hundreds of thousands of Australian’s annually. Understanding this need is why this free tax calculator and rates website has been created.