Tax seems confusing and time-consuming most days, to most people. 

And as tax agents, we can confirm it is ever-changing, full of jargon and contradictory rules and confusing... even after the Australian Taxation Office (ATO) tried to simplify it. 

Here are the different types of tax bills that you may also encounter as an employee:

PAYG Instalment 

When you pay tax on your previous year's tax return from untaxed sources, you may be required to pay tax in advance of next year.  This is a PAYG Instalment. 

It may be payable if:

• you have business income
• you receive employee shares from your employer
• you earn a lot of interest on bank accounts,
• you receive dividends at a high tax rate

When you pay your PAYG Instalment, this reduces the amount of tax that you pay at the end of the year when you lodge your tax return.  Each year when you lodge your tax return the ATO re-calculates your instalment amount, so lookout for a different amount after-tax lodgement.

Div 293 tax

Division 293 tax is a tax for high-income earners.  If you earn more than $250,000 (including your super contribution amount for the year) then your super is taxed at 30% and not the normal 15% super tax rate.  You will receive a bill for this in your name, but you can forward it to your super fund to pay, either via myGov or a paper form.

Once both your tax return and the super fund tax returns have been lodged, you may be assessed for Div 293. 

Excess Concessional Contributions (ECC)

If you put more super into your super fund than your threshold amount, then this may be taxed at your normal tax rates, rather than at the super fund tax rates.

You will receive a tax bill plus an ECC Charge for the extra tax.  You may choose to take the excess funds from your super fund to help you pay this bill.

We cannot estimate if you will receive an ECC bill, as it is based on your super contributions.

GST

As an employee, you will pay GST for the things that you buy (well some of them anyway - read more next fortnight!).  GST is an end-user tax, and just something you have to pay, unfortunately.

PAYG Withholding

If you receive wages, the tax will already have been deducted before the rest is sent to you. PAYG Withholding is the term of this tax. (Affectionately known as "Wages tax").

This is the tax you have already paid when you file your tax return at the end of the year. If you have overpaid taxes, you may be eligible for a refund. You may receive a bill if you haven't paid enough tax.

 Lodging your tax return

The process of lodging your tax return is the finalisation of your tax obligations for the year.  If you get a refund, it's because you paid too much tax.  If you have to pay tax, you didn't have enough credits with the Tax Office and have to pay a bit more.

Notice Of Assessment

A notice of assessment is provided to individuals (not companies, trusts or partnerships).

It outlines your total income for the year, and then all of the adjustments you have taken advantage of, such as zone offsets, and any additional taxes such as Medicare Levy and Medicare surcharge.