Financial Glossary — Income Tax Calculator

All income that must be declared to the ATO and is subject to tax, including salary, business income, rental income and capital gains.

An expense that reduces your assessable income, thereby reducing the amount of tax you pay.

The Australian tax year runs from 1 July to 30 June. Your tax return covers income and deductions in this period.

A government loan scheme for tertiary education. Repayments are compulsory once your income exceeds the repayment threshold ($54,435 for 2025-26).

A tax offset reducing the amount of tax payable for individuals earning up to $66,667 per year.

The rate of tax applied to the last dollar of income. Australia has a progressive system — higher income attracts higher marginal rates.

A 2% levy on taxable income that funds Australia's public health system. Low-income earners may receive a reduction or exemption.

An additional 1-1.5% levy for high-income earners without private hospital cover.

When deductible investment expenses exceed income, creating a tax loss that reduces your other taxable income.

The system where employers withhold tax from employee wages and remit it to the ATO throughout the year.

An arrangement where pre-tax income is directed to superannuation or other benefits instead of take-home pay, reducing taxable income.

A unique identifier assigned by the ATO used for tax and superannuation purposes.

A direct reduction in the amount of tax payable (not a deduction from income). Offsets include LITO and the low and middle income tax offset.

Assessable income minus allowable deductions. This is the amount on which your income tax is calculated.

Tax withheld by payers (employers, banks) before payment reaches you. Reconciled in your annual tax return.