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FEE-HELP repayments

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Hi, I am trying to understand if I submit the withholding form to my employer in relation to my FEE-HELP study loan, is that money taken out before tax? Ie. like salary sacrificing. And will my taxable income be reduced as a result?
Eg. Say, if I have $10,000 taken out over the fin year through my employer withholding payments, is my tax obligation reduced? Thank you.
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Taxicorn

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The money taken out is not used to immediately repay your debt but held as a credit by the ATO until you lodge your tax return at the end of the financial year.

 

This is done with tax so no it does not reduce your taxable invome.

 

Once your correct taxable income and repayment income is known any credit that is not needed to pay back any additional tax payable or government debts will then be used to repay the debt. Any surplus or shortfall will then be credit/debited to you.


1 REPLY 1

Most helpful response

Taxicorn

Replies 0

The money taken out is not used to immediately repay your debt but held as a credit by the ATO until you lodge your tax return at the end of the financial year.

 

This is done with tax so no it does not reduce your taxable invome.

 

Once your correct taxable income and repayment income is known any credit that is not needed to pay back any additional tax payable or government debts will then be used to repay the debt. Any surplus or shortfall will then be credit/debited to you.