A refund is your own money coming back
Every pay, your employer withheld an amount of tax based on a guess at where you would end the year. At lodgment the real number is worked out. The refund is the gap.
That framing matters because a large refund gets treated as a win, and it is closer to the opposite: you lent the ATO money, interest free, for up to twelve months. If it happens by the same margin every year, the thing to change is the withholding rather than the celebration.
A deduction is not a rebate
This is the single most expensive misunderstanding in Australian tax, and it is why people buy things in the last week of June.
A deduction reduces your taxable income. It does not reduce your tax bill by its own value. So $1,000 of work expenses is worth $1,000 multiplied by your marginal rate: about $320 for most earners, up to $470 at the very top, and nothing at allif you earn below the tax-free threshold.
Spending $1,000 to recover $320 still leaves you $680 worse off. The tool prints what your claim cost beside what it is actually worth, because the distance between those two numbers is the whole lesson. Claim every dollar you genuinely spent. Never spend in order to claim.
The one case where a deduction is worth far more than its rate
There is an exception, and it is the reason the tool works this out by running the whole calculation twice rather than multiplying by a percentage.
The Medicare levy surcharge is charged on your entire income once you cross the threshold, not on the part above it. So a deduction that carries you back under the line does not just save its marginal rate, it removes the whole surcharge. On an income of $102,000 for 2025-26, a $2,000 claim drops you under the $101,000 single threshold and is worth well over 60% of itself rather than the usual 32%.
The $300 rule is a cliff in paperwork, not in money
You can claim up to $300 of work-related expenses without written evidence. Almost everybody knows that much. What catches people is what happens at $301.
The ATO's wording is unambiguous: the evidence must prove the total amount you claim, not just the amount over $300. There is no receipt-free first $300 sitting underneath a documented remainder. Cross the line and you need records for all of it, and you keep them for five years from the day you lodge.
Car expenses, meal allowances, award transport payments and travel allowances are outside this threshold entirely and carry their own rules. And there is a second, unrelated $300 rule about equipment: an asset costing $300 or less can be deducted immediately rather than depreciated over its life. Same number, different rule, and they get confused constantly.
The study loan bill nobody saw coming
Extra withholding for a HELP or other study loan only happens if you ticked that box on your TFN declaration when you started. Plenty of people did not, and plenty more started the job before the debt existed and never went back to update it.
Nothing was set aside across the year, so the entire compulsory repayment is assessed at lodgment in one lump. It is not a penalty and it is not more than you owed. It is the same money arriving in the least convenient possible shape, and it is the most common reason a return that should have been a refund turns into a bill. Telling your employer now spreads next year's across your pays.
Why last year's rates and not this year's
Australia's income year ends on 30 June and lodgment opens on 1 July. A return you are filing now is for the year that has just finished, so it runs on 2025-26 figures throughout.
That is not a technicality. The second tax bracket was 16c in 2025-26 and is 15c now. The study loan repayment threshold was $67,000 and is now $69,528. The surcharge thresholds moved too. A calculator using the current year's rates against last year's income produces a wrong answer that looks entirely reasonable, which is the worst kind.
If you want the current year instead, for planning rather than lodging, the pay calculator runs on 2026-27.
Investment income, capital gains and rentals are out
Offsets beyond the low-income Medicare reduction, investment income, capital gains, rental properties, business or sole trader income, second jobs, part years and anything involving a spouse's income beyond the surcharge threshold. It is an estimate for a straightforward salaried return, so you know what to expect before you open myTax.
It is not a lodgment and it does not talk to the ATO. Nothing you type is uploaded, there is no account, and if you turn your network off it still works.
Common questions
Which year does this calculate?
2025-26, the year that ended on 30 June 2026, because that is the one you lodge from 1 July onwards. It matters more than it sounds: the second tax bracket was 16c in 2025-26 and is 15c now, the study loan repayment threshold was $67,000 and is now $69,528, and the surcharge thresholds moved too. A calculator running this year's rates against last year's income gives a wrong answer that looks completely reasonable.
Why am I getting a refund at all?
Because your employer withheld tax from every pay based on a guess at your annual position, and the guess is rarely exact. At lodgment the real figure is worked out and the difference comes back. A refund is not a rebate or a bonus, it is your own money returning, and a very large one means you lent it to the ATO interest free for up to a year. If that happens every year, the fix is at the withholding end rather than something to celebrate.
Is a $1,000 deduction worth $1,000 back?
No. A deduction reduces your taxable INCOME, not your tax, and that is the most expensive misunderstanding in Australian tax. So $1,000 of deductions is worth $1,000 times your marginal rate: roughly $320 for most people, up to $470 at the top, and nothing at all if you earn under the tax-free threshold. Spending $1,000 in June to get $320 back still leaves you $680 down. Claim every dollar you genuinely spent, and never spend in order to claim.
Can I claim $300 without receipts?
Yes, but only if your total claim stays at or under $300. The ATO's rule is that once the total goes over, the written evidence must prove the total amount you claim, not just the amount above $300. So claiming $301 means receipts for $301, not for $1. There is no receipt-free first $300 once you cross the line. Car, meal allowance, award transport and travel allowance expenses sit outside this threshold and have their own rules.
How does working from home get claimed?
The fixed rate method is 70 cents for every hour worked from home in 2025-26, and it covers internet, mobile and home phone, electricity, gas and stationery. You cannot then claim those things separately as well. You do need a record of the hours, and a diary or a spreadsheet is enough. Equipment like a desk or a monitor is claimed separately, immediately if it cost $300 or less and over its effective life if it cost more.
Why do I owe money on my study loan when I have been paying it all year?
Usually because your employer was never told about it. The extra withholding for a study loan only happens if you ticked that box on your TFN declaration, and plenty of people did not, or started the job before the debt existed. Nothing was set aside, so the whole year's compulsory repayment is assessed in one go at lodgment. It is not a penalty and it is not extra money, it is the same amount arriving in the worst possible shape. Telling your employer spreads next year's across your pays.
What is the Medicare levy surcharge doing on my return?
It is assessed at lodgment rather than withheld, which is why it shows up as a surprise. If you earned over the threshold for the year and did not hold private patient hospital cover, you owe a percentage of your whole income, not of the part above the line. In 2025-26 the single threshold was $101,000. That is also why a deduction that carries you back under the threshold is worth far more than its marginal rate: it removes the entire charge.
Is this a lodgment?
No. It is an estimate for a straightforward salaried return, so you know roughly what to expect before you open myTax. It leaves out offsets, investment income, capital gains, rental properties, second jobs and part years. Nothing is uploaded, there is no account, and the calculation happens in your browser.