why is the amount on my tax withheld became a tax credit? and l need to pay it to the ATO

 Author: BlakeATO(Community Support)Community Support

ATO Certified Response6 Dec 2021

Hi @Don27

Your notice of assessment will tell you your total taxable income, your tax payable on that income, and the credit for tax already paid during the year. Your PAYG withholding your employer takes goes into the credits for tax already paid.

If there is more tax payable on your income than your employer has withheld, you will need to pay the difference. This sometimes happens if you don't tell your employer you have a study loan, and then you are liable for a compulsory repayment. Or if you are a foreign resident for tax purposes, but have told your employer you're a resident, and therefore been taxed incorrectly. Or if you have other income sources and claimed the tax-free threshold at multiple (you can only correctly claim it at one at a time).

You can read about your notice of assessment on our website.