Wage plus commission and HECS how will my TAX work?

Question

I work in NSW and earn a flat wage plus monthly commission and have HECS debt. In previous jobs i've always received a decent tax return. Our wage is taxed normal and commission is taxed at 48%. On the group certificate it has the total gross payment which combines the two (39400) and tax of 6328. Apparently as of this year i don't earn enough to be paying hecs as yet, but will i still get a return or will i end up owing? Can the tax department see that my wage was only 28 and until recently 34 a year? and see that the rest is commission taxed at a higher rate?? Argh i'm so confused!!

Answer 1

The ATO "will see" what you put in your tax return i i.e., your Taxable Income. A TAX RETURN is the form you fill out on paper or Etax and lodge to the ATO - the result shown on your Notice of Assessment is either a tax refund or a tax payable amount).

Taxable Income = Assessable Income minus allowable deductions.

Assuming you do not claim any deductions in your tax return and have no other sources of income or anything else to declare, your Notice of Assessment may look something like this:

Taxable Income = $39400

Therefore:

Tax on taxable income: $6420

Plus Medicare Levy: $591

Plus HELP (HECS) repayment: $0

Minus Low Income Tax Offset: $374

Minus PAYG taken out of wages: $6328

Equals: $309 net tax you'll have to pay

At the end of the day if you earn it, you pay tax on it - either as you earn it or after you do your tax return. You only get a tax refund if you paid more tax during the tax year than you were were required to. Perhaps if you can claim some expense deductions your taxable income will be less and therefore your tax payable will be less too.