Tax

Tax

Here’s a forward-thinking, detailed breakdown of what you (a 24-year-old Brisbane-based part-time employee + private contractor + stock investor) need to know about doing taxes in Australia. I’ll address key areas, things to watch, and some rough calculations and planning to keep you ahead of the game.

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1. The big picture: how income tax works in Australia

• As a resident for tax purposes, you pay tax on your taxable income for the financial year (1 July → 30 June).
• The tax system is progressive: higher income → higher marginal rates.
• You lodge a tax return (via Australian Taxation Office “ATO”) each year declaring all assessable income, claiming allowable deductions, and calculating how much you owe (or refund) for the year.
• For 2025-26 (and nearby years) you’ll also face the Medicare levy (generally 2%) if your income is above thresholds.
• Since you have multiple income types (employment + contracting + investment), you’ll need to carefully declare all of them and understand your deduction opportunities.

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2. Your income scenario & what it means (2024-25 Financial Year)

Your actual income for 2024-25 (extracted from 25 payslips + invoices):

• $55,566.80 from part-time employment at Recovery Metrics (4 days/week).
• $6,762.50 from private contracting (Personal Services Income).
• Investment income via stocks (through CommSec and CMC Markets): dividends $0 (to be confirmed with statements), capital gains/losses $0 (no sales in FY 2024-25).
• Total assessable income: $62,329.30

Key Employment Details from Payslips:

• Gross earnings: $55,566.80 (from 25 fortnightly payslips)
• Net pay received: $45,408.80
• PAYG tax withheld: $9,224.00
• Student loan repayments (SFSS): $934.00
• Superannuation (SGC): $6,390.13 (employer contributions)

Employment income ($55,566.80)

• Your employer withholds PAYG tax from your salary/wages, meaning some tax is pre-paid ($9,224.00 withheld for 2024-25).
• Student loan repayments (SFSS) of $934.00 were also withheld (these are NOT tax deductible - they’re compulsory repayments).
• At tax time you’ll include your salaries/wages as part of your taxable income.
• You can claim work-related deductions (if eligible) to reduce taxable income, but only if you meet the ATO rules (see below).

Contractor income ($6,762.50)

• As a private contractor you are likely treated as self-employed/sole trader (unless you’ve set up a company). The ATO has guidance on “working as an independent contractor”. (Australian Taxation Office)
• Key implications: you’ll need to keep business records, potentially register for an ABN (Australian Business Number), determine whether GST applies (more on that). (Aus Legal Hub)
• Because tax might not be automatically withheld, you must ensure you set aside funds to cover your tax liability on that income.

Investment income

• You must declare all investment income: interest, dividends (including franking credits), capital gains (or losses) from share sales. (Australian Taxation Office)
• If you held shares for more than a year, you may qualify for the 50% discount on a capital gain (for individuals) when calculating net capital gain. (Wikipedia)
• Depending on how active you are (trading vs passive investing) the ATO may scrutinise things more closely.

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3. Deduction-opportunities & things to watch

Since you have multiple income streams, you’ll want to maximise deductions where legitimate — but you must keep records and stay within ATO rules.

Employment & contractor deductions

• For your contracting income: you may have business-deductible expenses (e.g., tools/equipment, home office if eligible, travel relating to the contracting work, etc). Several guides talk about contractor tax deductions. (taxationhouse.com.au)
• You need to be clear on the difference between “employee work-related expense” vs “self-employed business expense”. The rules differ. (ismaccountants.com.au)
• Some common “no-go” areas: commuting (home to regular workplace) is generally not deductible. (Accountantify)
• Keep good records: receipts, invoices, logbooks if travel/vehicle use, home office records if you use part of your home for contracting. Be prepared for scrutiny. (News.com.au)
• If your annual turnover (from your contracting business) exceeds the GST registration threshold (currently $75,000) you would need to register for GST. In your case $6,762.50 is well under, so you don’t need to register. (Aus Legal Hub)
• Super contributions: as a contractor you aren’t automatically covered by employer super contributions (depending on your structure). You may want to voluntarily contribute to superannuation for tax-effectiveness.

Investment deductions & capital gains

• If you hold shares that pay dividends, you include both the cash dividend and the franking credit in your taxable income. The franking credit acts like a tax paid by the company which you get credit for. (Wikipedia)
• If you sell shares at a gain: you’ll calculate the cost base (purchase price + incidental costs) and proceeds; the net capital gain is included in your taxable income. If you held for >12 months, you may apply the 50% CGT discount (for individuals). (Australian Taxation Office)
• If you made a capital loss, this can be carried forward to offset future capital gains (but not general income). (Australian Taxation Office)
• If you are active/trading shares rather than passive investing, the ATO may treat income differently (ordinary income) — so your intent and pattern matter.
• Make sure you receive full statements from your broker(s) (CommSec, CMC Markets) showing any distributions, franking credits, share sale transactions.

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4. Rough estimate of tax for your scenario (2024-25)

Let’s do a simplified estimate based on your actual 2024-25 income:

Assumptions (Based on Actual 2024-25 Data)

• Employment income: $55,566.80 (verified from 25 payslips)
• Contracting income: $6,762.50 (Personal Services Income)
• Investment income: $0 (to be updated with bank/broker statements)
• Total gross income: $62,329.30
• Actual deductions claimed: $2,116.22
  • Work-from-home (fixed rate): $987.52 (1,472 hours × $0.67)
  • AI subscriptions: $1,128.04 (ChatGPT $408 + GitHub Copilot $720.04)
  • Other deductions: $0.66 (minor items)
• Marginal tax rates (2024-25 year for resident individuals):
  • 0 – $18,200: 0%
  • $18,201 – $45,000: 19%
  • $45,001 – $120,000: 32.5%
  • $120,001 – $180,000: 37%
  • $180,001+: 45%
• Medicare levy of 2% on taxable income (above threshold)
• Low Income Tax Offset (LITO): Automatic offset for income <$66,667

Calculation

• Total assessable income: $62,329.30
• Total deductions: $2,116.22
• Taxable income: $60,213.08

Income Tax Calculation: * Tax on first $18,200 = $0 * Tax on $18,201 → $45,000 = ($45,000 - $18,200) × 19% = $5,092.00 * Tax on $45,001 → $60,213.08 = ($60,213.08 - $45,000) × 32.5% = $4,944.25 * Income tax before offsets: $10,036.25 * Less: Low Income Tax Offset (LITO) = -$700.00 (maximum offset for income <$66,667) * Income tax after offsets: $9,336.25

Medicare Levy: * $60,213.08 × 0.02 = $1,204.26

Total Tax Liability: * Income tax: $9,336.25 * Medicare levy: $1,204.26 * Total tax payable: $10,540.51

Tax Position: * PAYG tax withheld from employment: $9,224.00 * Student loan repayments withheld: $934.00 (separate from tax, not a credit) * Amount OWED to ATO: $1,316.51

Investment income add-on

• Investment income of $0 for FY 2024-25 (to be confirmed with CommSec/CMC annual statements).
• No capital gains events (no shares sold during the year).
• Any capital losses from prior years can be carried forward to offset future capital gains.

Take-home planning

• Gross income: $62,329.30
• Total tax liability: $10,540.51
• Net after-tax income: $51,788.79 (83.1% take-home rate)
• Important: The $934 in student loan repayments is separate - it’s a compulsory repayment, not tax.
• For budgeting: You received $45,408.80 net pay + need to pay $1,316.51 additional tax = $44,092.29 final take-home

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5. Key compliance / admin items & action list

Here are things to do to stay ahead and avoid surprises:

Item	Why it matters	Suggested action
Register for ABN (if not already) for contracting income	The ATO expects you to operate as a business if you’re a contractor. (Australian Taxation Office)	If you haven’t, register for ABN as a sole trader (free) and issue invoices quoting it.
Maintain separate bank account / good record-keeping for contracting	Helps separate business vs personal, simplifies deduction tracking. (QuickBooks)	Set up a separate account; keep copies of invoices, receipts, and logbooks.
Estimate and pay quarterly “PAYG instalments” (if required)	To avoid large lump-sum at tax time and possible interest/penalties.	Monitor your contracting and investment income; talk to accountant if instalments look advisable.
Track investment transactions (share purchases, sales, dividends, franking credits)	You need correct cost bases & franking credits for correct CGT and dividend reporting. (Australian Taxation Office)	Export statements from CommSec and CMC Markets; store in a folder; note purchase date, cost‐base, brokerage.
Keep work-related expenses and vehicle/home-office logbooks (if applicable)	The ATO may scrutinise deductions, especially home-office, vehicle, and contractor claims. (News.com.au)	If you work from home for your contracting, track hours; keep bills and apply correct apportionment.
Know the tax return deadlines and processes	Missing deadlines may incur penalties; lodging via myTax, paper or tax agent.	Usually lodge by 31 October if doing yourself; consider using a registered tax agent for complex affairs.
Consider voluntary super-contributions	These can reduce taxable income and build retirement savings tax-efficiently.	Explore salary sacrifice or personal deductible super contributions; check caps.
Stay aware of rule changes	Tax rules change, and with investing + contracting your situation has more moving parts.	Read ATO newsletters, or work with tax professional.

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6. Future planning & optimisations

Since you’re relatively young and starting to build a mix of income and investments, here are some forward-thinking tips:

• Tax-effective investing: Holding shares that pay franked dividends could be beneficial (you get franking credits). Make sure you hold shares >12 months if CGT discount matters.
• Business growth: If your contracting side grows (say > $75k turnover), you’ll need to consider GST registration, possibly a different business structure (company vs sole trader) for tax/protection advantages. (Aus Legal Hub)
• Superannuation: Early contributions into super can be a smart way to lock in lower tax rates (typically 15% inside super) and build long-term wealth.
• Asset diversification & CGT strategy: Think about how you dispose of shares (timing, offsetting losses) to manage capital gains tax.
• Cash-flow for tax: Since contracting and investing add variability, build a “tax buffer” in your bank (e.g., set aside ~30% of contracting + investment earnings) so you’re not caught by surprises.
• Professional adviser: Given your mix of employment + contracting + investments, a tax accountant or financial adviser (even just once/year) could identify deduction opportunities, structure considerations, and ensure compliance.

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7. Things specific to Queensland / Brisbane

There are no major unique “state tax” burdens for personal income in Queensland different from other states (personal income tax is federal), but one thing to keep in mind:

• If you use a vehicle for your contracting work and live in Brisbane (or commute regionally), the mileage/log-book rules apply the same as national rules; ensure you’re capturing the “business-use” portion only (commuting to a regular workplace is not deductible).
• If you’re working from home (in Brisbane) for your contracting business, you may be eligible to claim home-office deductions (internet, phone, electricity) under ATO guidelines — but you must apportion correctly and keep records.
• For investment income: if you hold property in Queensland in future, you’ll need to consider state land tax/fees — but for shares now, it’s federal.

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8. Summary checklist for your upcoming tax return

Here’s a checklist tailored for you, Ben (software-engineer, part-time + contractor + investor):

• Ensure you have your PAYG summary / income statement from your employer.
• Collect records of your contracting income: invoices, ABN registration, bank statements, expenses.
• Gather investment statements: dividend statements (with franking credits), share purchase/sale data, brokerage fees.
• List and quantify all deductible expenses (contractor business expenses, work-related expenses, home office/travel if relevant).
• Ensure cost bases on shares are correct (including brokerage) for any sales.
• Set aside sufficient funds for tax (estimate ~ 30% of contracting + investment profit above employment).
• Consider voluntary super contributions (if planning) and check caps.
• Decide if you will lodge yourself (via myTax) or engage a tax agent (benefit: expertise + later lodgement deadline).
• Lodge by the appropriate deadline. If you use a tax agent, register early before 31 October to get the agent’s extended lodgement date.
• Review next year’s tax-flow: plan for tax-buffer, business/contractor growth, investment CGT strategy.

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If you like, I can run a more detailed projection for you (including your expected investment income, exact tax brackets for 2025-26, and simulate how different deduction scenarios impact your tax) and also prepare a tailored spreadsheet template you can reuse each year. Would you like that?

9. Updated Tax Summary (FY 2024-25) - October 2025

Based on comprehensive payslip extraction and tax calculations:

📊 Income Breakdown

Source	Amount	Notes
Employment (Recovery Metrics)	$55,566.80	25 payslips verified
Contracting (Personal Services)	$6,762.50	PSI income
Investment Income	$0.00	No dividends/sales FY 24-25
Total Assessable Income	$62,329.30

💰 Deductions Claimed

Category	Amount	Method
Work from Home	$987.52	Fixed rate: 1,472 hrs × $0.67
AI Subscriptions	$1,128.04	ChatGPT + GitHub Copilot
Other Deductions	$0.66	Minor items
Total Deductions	$2,116.22

🧮 Tax Calculation

Item	Amount
Assessable Income	$62,329.30
Less: Deductions	-$2,116.22
Taxable Income	$60,213.08
Income Tax (before offsets)	$10,036.25
Less: LITO (Low Income Tax Offset)	-$700.00
Income Tax	$9,336.25
Medicare Levy (2%)	$1,204.26
Total Tax Liability	$10,540.51

💸 Tax Position

Item	Amount
Total Tax Liability	$10,540.51
PAYG Tax Withheld	$9,224.00
AMOUNT OWED	$1,316.51
Student Loan Withheld	$934.00
Superannuation Contributed	$6,390.13

📈 Key Metrics

• Effective Tax Rate: 16.9% (total tax / gross income)
• Take-Home Rate: 83.1% (after-tax income / gross income)
• After-Tax Income: $51,788.79
• Actual Cash Received: $45,408.80 (net pay from employment)
• Final Take-Home: $44,092.29 (after paying $1,316.51 owed)

⚠️ Important Notes

1. Student Loan Repayments ($934): These are NOT tax deductible - they’re compulsory repayments based on income thresholds.
2. Superannuation ($6,390.13): Employer contributions go to your super account, not included in your taxable income.
3. Investment Income: Confirm $0 with annual tax statements from CommSec and CMC Markets.
4. Equipment Deductions: Currently not claimed - review if you purchased any work equipment during the year.
5. Contracting Expenses: Currently minimal - ensure all legitimate business expenses are claimed.

📅 Next Actions

• Review and update investment income when CommSec/CMC statements arrive
• Verify all AI subscription amounts with receipts
• Check for any additional work-related equipment purchases
• Prepare $1,316.51 for payment to ATO by due date
• Consider voluntary super contributions for next FY (tax-effective savings)
• Lodge tax return by October 31, 2025 (or register with tax agent for extended deadline)

🎯 Tax Planning for FY 2025-26

Contracting Income Management: - Set aside ~20-25% of contracting income for tax - Consider quarterly PAYG instalments if contracting income increases - Keep detailed records of all business expenses

Deduction Optimization: - Continue WFH diary for fixed rate method claims - Track all work-related subscriptions and tools - Consider actual cost method if expenses exceed fixed rate

Superannuation Strategy: - Current employer contributions: $6,390.13/year - Consider salary sacrifice to maximize concessional contributions - Contribution cap: $30,000/year (2024-25) - Tax benefit: 15% in super vs up to 32.5% marginal rate

# FY 2024-25 Tax Summary - Verified from Payslips
# Data extracted from 25 payslips using extract_payslips.py

# Income
employment_gross = 55566.80  # From payslip extraction
contracting_psi = 6762.50    # Personal Services Income
investment_income = 0.00      # To be confirmed with statements
total_income = employment_gross + contracting_psi + investment_income

# Deductions
wfh_deduction = 987.52        # 1,472 hours × $0.67 (fixed rate)
ai_subscriptions = 1128.04    # ChatGPT + GitHub Copilot
other_deductions = 0.66       # Minor items
total_deductions = wfh_deduction + ai_subscriptions + other_deductions

# Taxable Income
taxable_income = total_income - total_deductions

# Tax Calculation (2024-25 rates)
def calculate_income_tax(income):
    """Calculate Australian income tax for 2024-25"""
    if income <= 18200:
        return 0
    elif income <= 45000:
        return (income - 18200) * 0.19
    elif income <= 120000:
        return 5092 + (income - 45000) * 0.325
    elif income <= 180000:
        return 29467 + (income - 120000) * 0.37
    else:
        return 51667 + (income - 180000) * 0.45

income_tax_before_offsets = calculate_income_tax(taxable_income)
lito = 700.00  # Low Income Tax Offset (automatic for income < $66,667)
income_tax = income_tax_before_offsets - lito
medicare_levy = taxable_income * 0.02
total_tax = income_tax + medicare_levy

# Tax Position
payg_withheld = 9224.00       # From payslips
student_loan_withheld = 934.00  # SFSS (not a tax credit)
amount_owed = total_tax - payg_withheld

# Net Position
employment_net_received = 45408.80  # Actual net pay from 25 payslips
final_take_home = employment_net_received - amount_owed

# Print Summary
print("=" * 70)
print("FY 2024-25 TAX SUMMARY (Verified from 25 Payslips)")
print("=" * 70)
print()
print("INCOME:")
print(f"  Employment (Recovery Metrics):  ${employment_gross:>12,.2f}")
print(f"  Contracting (PSI):              ${contracting_psi:>12,.2f}")
print(f"  Investment Income:              ${investment_income:>12,.2f}")
print(f"  {'─' * 44}")
print(f"  Total Assessable Income:        ${total_income:>12,.2f}")
print()
print("DEDUCTIONS:")
print(f"  Work from Home (1,472 hrs):     ${wfh_deduction:>12,.2f}")
print(f"  AI Subscriptions:               ${ai_subscriptions:>12,.2f}")
print(f"  Other:                          ${other_deductions:>12,.2f}")
print(f"  {'─' * 44}")
print(f"  Total Deductions:               ${total_deductions:>12,.2f}")
print()
print("TAX CALCULATION:")
print(f"  Taxable Income:                 ${taxable_income:>12,.2f}")
print(f"  Income Tax (before offsets):    ${income_tax_before_offsets:>12,.2f}")
print(f"  Less: LITO:                     ${-lito:>12,.2f}")
print(f"  Income Tax:                     ${income_tax:>12,.2f}")
print(f"  Medicare Levy (2%):             ${medicare_levy:>12,.2f}")
print(f"  {'─' * 44}")
print(f"  TOTAL TAX LIABILITY:            ${total_tax:>12,.2f}")
print()
print("TAX POSITION:")
print(f"  PAYG Withheld:                  ${payg_withheld:>12,.2f}")
print(f"  Student Loan Withheld:          ${student_loan_withheld:>12,.2f} (not a credit)")
print(f"  {'─' * 44}")
print(f"  AMOUNT OWED TO ATO:             ${amount_owed:>12,.2f}")
print()
print("CASH FLOW:")
print(f"  Net Pay Received (25 payslips): ${employment_net_received:>12,.2f}")
print(f"  Less: Amount Owed:              ${-amount_owed:>12,.2f}")
print(f"  {'─' * 44}")
print(f"  FINAL TAKE-HOME:                ${final_take_home:>12,.2f}")
print()
print("KEY METRICS:")
print(f"  Effective Tax Rate:             {(total_tax/total_income)*100:>11.1f}%")
print(f"  Take-Home Rate:                 {((total_income-total_tax)/total_income)*100:>11.1f}%")
print(f"  Marginal Tax Rate:              32.5%")
print()
print("=" * 70)
print("Data Source: 25 payslips from nbs/Pay (Jul 2024 - Jun 2025)")
print("Extraction Script: nbs/Tax/extract_payslips.py")
print("Tax Calculation: nbs/Tax/p_02_my_tax_2024-25.ipynb")
print("=" * 70)

======================================================================
FY 2024-25 TAX SUMMARY (Verified from 25 Payslips)
======================================================================

INCOME:
  Employment (Recovery Metrics):  $   55,566.80
  Contracting (PSI):              $    6,762.50
  Investment Income:              $        0.00
  ────────────────────────────────────────────
  Total Assessable Income:        $   62,329.30

DEDUCTIONS:
  Work from Home (1,472 hrs):     $      987.52
  AI Subscriptions:               $    1,128.04
  Other:                          $        0.66
  ────────────────────────────────────────────
  Total Deductions:               $    2,116.22

TAX CALCULATION:
  Taxable Income:                 $   60,213.08
  Income Tax (before offsets):    $   10,036.25
  Less: LITO:                     $     -700.00
  Income Tax:                     $    9,336.25
  Medicare Levy (2%):             $    1,204.26
  ────────────────────────────────────────────
  TOTAL TAX LIABILITY:            $   10,540.51

TAX POSITION:
  PAYG Withheld:                  $    9,224.00
  Student Loan Withheld:          $      934.00 (not a credit)
  ────────────────────────────────────────────
  AMOUNT OWED TO ATO:             $    1,316.51

CASH FLOW:
  Net Pay Received (25 payslips): $   45,408.80
  Less: Amount Owed:              $   -1,316.51
  ────────────────────────────────────────────
  FINAL TAKE-HOME:                $   44,092.29

KEY METRICS:
  Effective Tax Rate:                    16.9%
  Take-Home Rate:                        83.1%
  Marginal Tax Rate:              32.5%

======================================================================
Data Source: 25 payslips from nbs/Pay (Jul 2024 - Jun 2025)
Extraction Script: nbs/Tax/extract_payslips.py
Tax Calculation: nbs/Tax/p_02_my_tax_2024-25.ipynb
======================================================================