Tax Return:: Which Payslip do I use for my Tax Return?

Hello, this is your tax specialist, P&C Tax Professionals.

Today, we would like to answer one of the most frequently asked questions when it comes to lodging your tax return.

The question is which payslip should we use when we are lodging our tax return. Many people often get confused as to whether they should be using the last payslip in June or the first payslip in July (since a financial year runs from 1 July previous year to 30 June current year).

Using the current financial year as an example, you would have to lodge a tax return reporting the income that you earned between 1 July 2020 to 30 June 2021. If you received your wages on 1st July for work done from the middle of June to the end of June and the payment date is recorded as 1 July 2021 on your payslip, this income should be included as part of your next financial year tax return (i.e. 2021-2022FY) not your current year tax return.

In other words, the Australian tax law strictly outlines that the payslip and the date on which you got paid (i.e. the payment date) is what you should be looking at irrespective of the period you have worked for.

Therefore, please check whether the payment date is before 30th June 2021 on your payslip and apply with the payslip you last received from your employer on or before 30th June 2021.

In addition, as shown on the payslip there is a YTD (Year-To-Date) amount which is basically your accumulated gross income and tax withheld amount for the whole financial year. This YTD amount only gets accumulated up to the end of June and at the start of July (i.e. the beginning of a new financial year), this YTD amount resets itself and accumulates again from the beginning of the new financial year.

If you ever get confused about whether the income set out on the payslip for the current financial year is correct, it may be helpful to check the YTD figures on your payslip.

Most companies reset the accumulated income as we head into a new financial year but if for whatever reason, your payslip has not reset itself and your wages are continuing to add on, it is best to consult with your employer and request for a payment summary instead.

I hope today's post has answered some of your burning questions and if you have any further questions, please contact us through our official Facebook page (P&C Tax Professionals - Australia) or via our email at: pnctax@naver.com.

Thank you and bye for now:)