Income and income tax

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Income tax

Individuals may be liable for a range of personal taxes. These taxes can be imposed on income earned, purchasing goods or services, selling CGT assets and other transactions.

You have a legal responsibility to know what taxes you are liable to pay. You can't claim, 'I didn't know I had to pay tax on it'. The Australian income tax system relies on taxpayers self-assessing, which means you are responsible for working out how much you need to declare and can claim on your tax return. You provide this information to the Australian Taxation Office (ATO) which then calculates how much income tax you must pay.

Details of how income tax works are described in other topics in this module.

  • Fact 26

    The introduction of electronic lodgement of tax forms in the late 1980s not only reduced the time it took to send out returns from ten weeks to two weeks but had a significant impact on the incidence of repetitive strain injury among data processors at the ATO.

Medicare levy surcharge

An extra amount payable by some taxpayers in addition to the Medicare levy. A taxpayer may have to pay the surcharge if they do not have the appropriate level of private hospital cover with a health fund and their Medicare levy surcharge income exceeds the threshold.

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