As part of your payroll, tax is withheld by your employer every pay period. The total tax withheld for the year forms the amount of tax that shows up in your PAYG Payment Summary (aka Group Certificate).

Assuming that your only taxable income is from your job, you shouldn’t have to pay any additional tax when you lodge your income tax return.

This is because your employer has already taken tax out every week/fortnight/month/etc throughout the year.

This is what you do…

You simply cross-check the tax withheld on your payslip against the ATO PAYG Withholding Tax Tables.

The ATO provides these simple tax tables to employers to allow them to easily deduct the correct tax from their employees. However, mistakes do happen and it is worthwhile double-checking.

This is what you need to know beforehand (HINT: have your payslip handy!):

1. What is your pay cycle? ie Weekly, Fortnightly, Monthly

2. How much are you getting paid per pay cycle?

3. Do you have HECS/HELP or SFSS?

4. Do you have leave loading? (most likely not)

5. Are you claiming a tax-free threshold for this employer?

Once you have the above information, you can use the Tax Tables that your employer also use. Here’s the link to the ATO’s PAYG Withholding Tax Tables.

Or….

If you are really lazy or just not into numbers (we don’t blame you), then click on this link to the ATO’s PAYG Withheld Calculator.

You enter all the information, click on Calculate and voila..! The calculator shoots out the Tax Withheld amount which should match up with your payslip.

If it doesn’t match AND you answered all the calculator questions correctly, it’s time to talk to your employer’s HR or Finance team.

It could be a simple case of ticking the wrong box when you first filled in your TFN Declaration form.

Note: The rates changed in July 09. So, when you will get a different tax withheld amount when you run the calculator in July 09.