The tax-free threshold is an amount of money you can earn each financial year without having to pay income tax. It is available to most Australian taxpayers and can be a great way to save money. In this article, we will discuss what the tax-free threshold is and how to claim it from your payer.
Understanding the Tax-Free Threshold
The tax-free threshold is a set amount of money that individuals can earn each financial year without having to pay income tax. This amount is currently set at $18,200 per year. This means that if you earn less than $18,200 in a financial year, you can claim the tax-free threshold and won’t have to pay income tax.
Additionally, you may be eligible to claim a further tax-free threshold if you are a dependent of another taxpayer. This is known as the Dependent Tax-Free Threshold and is currently set at $3,300. If you are eligible to claim this, you can earn up to $21,500 in a financial year without having to pay any income tax.
Claiming the Tax-Free Threshold
In order to claim the tax-free threshold from your payer, you will need to fill out a Tax File Number Declaration form. This form is available from the Australian Taxation Office website or from your employer. On the form, you will need to provide your Tax File Number (TFN) and indicate that you wish to claim the tax-free threshold.
Once you have completed the form, you will need to submit it to your payer. They will then be able to adjust your tax withholding rate accordingly. This will ensure that you are not paying more tax than necessary.
It is important to note that the tax-free threshold is only applicable to income earned within Australia. If you are earning income from overseas, you may not be eligible to claim the tax-free threshold.
The tax-free threshold is an amount of money that you can earn each financial year without having to pay income tax. Claiming the tax-free threshold can be a great way to save money and ensure that you are not paying more tax than necessary. In order to claim the tax-free threshold, you will need to fill out a Tax File Number Declaration form and submit it to your payer.
