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HECS/HELP deducations

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When I began my employment, I ticked the box on my TFN Declaration to indicate that I had a HECS-HELP debt, which states that "Your payer will withhold additional amounts to cover any compulsory repayment that may be raised on your notice of assessment." 

When I lodged my tax return, I found I had a large debt as my employer had NOT withheld these funds, as I had not earned over the threshold from them. However, I had a back-payment from a previous employer in the same financial year which did push me over the threshold, resulting in owing 4% HECS-HELP repayments, or nearly $2500.

My employer argues that they did not need to withhold funds due to my salary being under the threshold and that I should have specifically requested the funds to be withheld, additional to ticking this box ton the TFN Declaration.

Is this correct, or are they in the wrong?
All previous employers for part time and casual jobs where I was never going to earn over the threshold have always withheld my HELP repayments and then I've ended up getting a large tax return.

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Hi @bendigo82,

 

Welcome to our Community!

 

Your employer will withhold tax at the required tax rate based on the information you provide in your TFN declaration. If you receive additional payments (say from a second job or you received a back-payment from a previous employer) your current employer won't know you've received these payments unless you tell them. In this case, you'd need to advise your employer and request additional payments are deducted from your pay. 

 

When you lodge your tax return, we'll use information you've reported to work out your repayment income. If you've earned over the repayment income threshold and haven't had enough withheld during the year to cover your repayments, you'll receive a bill.

 

If you're experiencing difficulties paying this amount, you can request a payment plan online via myGov or by phoning us on 13 11 42 between 8am - 6pm, Monday to Friday.

 

Thanks, JodieH.

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Best answer

ATO Certified

Community Support

Replies 0

Hi @bendigo82,

 

Welcome to our Community!

 

Your employer will withhold tax at the required tax rate based on the information you provide in your TFN declaration. If you receive additional payments (say from a second job or you received a back-payment from a previous employer) your current employer won't know you've received these payments unless you tell them. In this case, you'd need to advise your employer and request additional payments are deducted from your pay. 

 

When you lodge your tax return, we'll use information you've reported to work out your repayment income. If you've earned over the repayment income threshold and haven't had enough withheld during the year to cover your repayments, you'll receive a bill.

 

If you're experiencing difficulties paying this amount, you can request a payment plan online via myGov or by phoning us on 13 11 42 between 8am - 6pm, Monday to Friday.

 

Thanks, JodieH.

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