Tax Free Threshold Not Claimed

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  tsunamisurfer on 03/11/2021 - 13:42

  +3

  Unless you are not eligible for the TFT (non-resident?), regardless of what you declare on your Tax Declaration with your employer, the TFT will be applied to your income tax assessment.

  All that will happen is that more tax than required is taken out of your weekly / fortnightly / monthly pay, but when the tax return is done the ATO will recognise that they have taken too much PAYG withholding amounts from you and give you a bigger refund than if you ticked yes to applying the TFT in the Tax Dec.

  • 

    funnysht on 03/11/2021 - 14:12

    thanks mate- yes i am a resident..so there's no option to tick when doing the tax return to state you haven't claimed the 18k tax free threshold yet?

    • 

      njastar on 03/11/2021 - 14:48

      Exact same thing happened to me, but I changed mid-way through the tax year. Got all that I paid back.

    • 

      samyall on 03/11/2021 - 15:01

      +2

      It doesn't matter if you have claimed it or not. When you do your tax you are telling the government how much taxable income you earned in the last financial year (income + capital gains - deductions - capital losses), at that point they calculate how much tax you owe based on that number, compare it to how much was withheld throughout the year and then either refund some or ask for more to make sure you pay the correct amount.

      In your case, you're likely to get a lot back as you're probably having between $6-7k too much withheld.

      If you want to fix this, talk to your employer as they are the ones that withhold the tax.

• 

  Flakuciernie63 on 03/11/2021 - 13:42

  +1

  you should get a refund autoatically , no worries

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  bobbified on 03/11/2021 - 13:44

  +1

  Any way to check?

  Check with your employer - you would've filled out your form at the start of your employment and your employer is witholding tax based on whether or not you ticked that box.

  Alternatively, look at your payslip and see whether the regular tax witheld amount matches the income amounts on the relevant tax witholding tables from the ATO.

• 

  dasher86 on 03/11/2021 - 15:13

  +1

  You're worrying too much.
  As above total tax is calculated when you do your tax return.

  If you forgot to tick claim tax free threshold with the employer, it means that throughout the year they will withold more of your pay for tax.
  Come tax return time - you will calculate how much tax you owe, it is matched against what was withheld and you either get a refund because they withheld more tax (most likely the case for you), or you will need to pay more tax as not enough was withheld.

  Clicking that box will more or less likely impact your tack home pay each week / month - and also if you get a refund or have to pay more at the year.
  Your total tax you pay for the year remains unchanged.

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  USER DC on 03/11/2021 - 16:11

  +1

  Yeah no point of giving your money to ATO just for sake of them holding onto it. I'd rather invest all the money, and then pay them tax using any dividends/profits of investments

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  hasher22 on 03/11/2021 - 17:23

  Don't worry, when you do your tax, it will even out and you'll get it back, if the employer did tax you correctly.

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  avoidfullprice on 03/11/2021 - 18:23

  You tick the box on the form you give to your HR department, so it doesn't withhold too much tax before tax return time.

  At tax return, it calculates your taxable income. There is no box to tick.