Most Australian residents need to lodge a tax return if their taxable income exceeded A$18,200 in 2024–25, but tax withheld, business activity or foreign residency can require a return even below that threshold. The answer depends on more than the amount you earned, so a person below the threshold may still need to lodge, claim a refund or notify the Australian Taxation Office.
You may be looking at your income statement after starting a new job, finishing study, moving to Australia or earning income from a side business, wondering whether the ATO expects anything from you. The safe approach is to check your residency, income type, withholding and business activity before deciding that no return is required.
Table of Contents
- Do I Need to Do a Tax Return in Australia?
- How the ATO Decides Whether You Must Lodge
- Special Cases That Change the Answer
- What Income Counts and What Happens If You Stay Silent
- A Worked Example for a New Migrant Professional
- Your Next Steps for Lodging This Year
- Frequently Asked Questions About Tax Returns
Do I Need to Do a Tax Return in Australia?
By Panbo Ye, CFP® | FCPA | SSA® | Founder, Everglow
Who this article is for
This guide is for Australian employees, sole traders, medical professionals, small and medium business owners, new migrants, international workers and people with investment or foreign income. It also provides context for people connected with companies, trusts, personal services income and professional practices.
Currency note: This article reflects Australian rules, thresholds and regulator guidance current as at 09/2026. The A$18,200 threshold is current as at 09/2026 for the 2024–25 income year, based on the Australian Taxation Office (ATO) guidance linked below.
The simplest starting point is the resident tax-free threshold. For many Australian residents, taxable income above A$18,200 means a tax return is required for 2024–25. However, the ATO also identifies other triggers, including tax withheld from income, carrying on a business, reportable fringe benefits, reportable super contributions and particular residency or income categories. See the ATO's tax-time lodgment guidance for the relevant compliance framework.
The decision therefore isn't a single yes-or-no calculation. A return might be needed to reconcile PAYG withholding, claim a refund, report business income or disclose Australian-source income earned while treated as a foreign resident. If no lodgement trigger applies, you may generally need to submit a Non-lodgment advice instead of just remaining silent.
How the ATO Decides Whether You Must Lodge
The Australian Taxation Office, commonly called the ATO, uses several signals to determine whether an individual must lodge. Think of the process like a smoke detector. Income above the threshold is one signal, but withheld tax, business activity, residency and particular income categories can activate the obligation as well.
The tax-free threshold is the amount of taxable income that may generally be taxed at no income tax for an eligible Australian resident. For many residents, that starting point is A$18,200 for 2024–25. It isn't a complete lodgement test, because taxable income and the requirement to lodge are related but distinct questions.
The main signals
First, consider your taxable income. If you're an Australian resident and your taxable income is above the threshold, you generally need to lodge. Taxable income is broadly your assessable income after allowable deductions, although the exact calculation depends on your circumstances.
Second, check whether tax was withheld. If your employer withheld even a small amount from your pay, you may need to lodge to reconcile that withholding or claim a refund. The ATO explains that a resident under the threshold may still need to lodge where tax was withheld, while a person with no withholding and no other trigger may generally be able to provide a Non-lodgment advice instead. The ATO's Non-lodgment advice guidance sets out this distinction.
Third, ask whether you carried on a business. A business obligation isn't switched off merely because the business made a loss or generated no income. The ATO's business income-tax return guidance states that a sole trader must lodge even where business income is below the tax-free threshold.
Finally, look for category-based triggers. Reportable fringe benefits, reportable super contributions, foreign employment income and particular investment or residency circumstances can affect the outcome. Your visa or employment label alone doesn't determine tax residency. For a broader discussion, review this guide to Australian tax residency.
Practical rule: Don't stop at “I earned less than A$18,200”. Ask whether tax was withheld, whether you carried on a business and whether your residency or income type creates another lodgement obligation.
Lodgement is driven by a combination of residency, income type and withholding, not income alone.
Special Cases That Change the Answer
The threshold test is most useful for a straightforward Australian resident employee with only salary income. It becomes less reliable when a person has a different residency status, operates a business, works under a special visa category or earns personal services income.
Foreign residents and working holiday makers
A foreign resident with A$1 or more of Australian taxable income must lodge an Australian tax return under the ATO rules. This can affect a person who lives overseas but earns Australian-source income, as well as someone whose Australian tax residency position changed during the year. The ATO's individual tax return instructions explain that residency status can change the practical result.
Working holiday makers on 417 or 462 visas have a separate trigger. They must lodge once Australian-source taxable income reaches A$45,001 or more. If your circumstances involve a working holiday visa, consider the Australian tax return guide for working holiday visa holders rather than relying on the ordinary resident threshold.
Migrants, students and business operators
New migrants and short-term students may be treated as non-residents for tax purposes while still earning Australian income that must be declared. Study arrangements, work location, living arrangements and the ATO's residency tests can matter more than the person's visa description.
A sole trader generally needs to lodge because the person carried on a business, even if the business earned no income or made a loss. Companies and trusts also generally have their own annual reporting and lodgement obligations, which aren't removed merely because the entity made no profit. The entity's structure, activity and tax status should be checked separately from the individual's return.
Personal services income, or PSI, is income mainly produced from an individual's personal efforts or skills. A PSI earner may need to consider special rules about deductions and attribution. A medical professional, consultant or contractor shouldn't assume that using an Australian Business Number automatically changes the nature of the income.
People should generally assume a lodgement review is needed if they:
- Earned Australian income as a foreign resident: The foreign-resident rule can apply from A$1 of Australian taxable income.
- Held a 417 or 462 visa: The working holiday maker threshold may apply instead of the ordinary resident test.
- Carried on a sole-trader business: A business return obligation can exist below the individual threshold.
- Received withheld tax or reportable amounts: Withholding, fringe benefits or reportable super can require reconciliation.
- Operate through a company or trust: Entity obligations may apply independently of personal profit.
This comparison shows why the same income amount can produce different outcomes.
| Your situation | Do you generally need to lodge? | Key trigger |
|---|---|---|
| Australian resident employee | Often, depending on income and other signals | Taxable income above A$18,200, withholding or another category trigger |
| Foreign resident | Yes, where the relevant Australian taxable income trigger applies | A$1 or more of Australian taxable income |
| Working holiday maker | Depending on visa and Australian-source income | 417 or 462 visa and taxable income of A$45,001 or more |
| Sole trader | Generally yes | Carrying on a business, even with no income or a loss |
| Company or trust | Generally yes | Entity activity and annual reporting obligations |
| PSI earner | Depending on the individual and entity facts | Personal services income rules and the underlying income activity |
What Income Counts and What Happens If You Stay Silent
The ATO's question isn't only “how much did you earn?” It also asks what kind of income you received and whether another condition applies. Salary and wages, business income, bank interest, dividends, foreign employment income, reportable fringe benefits and reportable super contributions can all be relevant to the lodgement decision.
Your income statement may contain employment information, but it won't necessarily explain every obligation. Investment income may appear in separate statements. Business income requires records of sales and expenses. Foreign employment income may need to be considered alongside residency, while reportable fringe benefits and reportable super contributions can create reporting requirements even when the amount of ordinary wages looks modest.
The ATO's taxable-income explanation can help you distinguish assessable income from deductions and understand why taxable income isn't just the amount deposited into your bank account.
If no return is required
If you don't meet any lodgement trigger, the appropriate step is generally a Non-lodgment advice to the ATO, unless an exemption applies. This tells the ATO that you don't need to lodge for the year and helps close the year in its records. It can be particularly relevant where all income was below the threshold and no tax was withheld.
Silence can create uncertainty. The ATO may not know whether you failed to lodge accidentally or whether you had no obligation at all. If a return was required and isn't lodged, penalties and interest may apply depending on the circumstances, the length of the delay and the ATO's response.
A non-lodgement decision should be recorded and communicated where required. “I didn't earn much” isn't the same as confirming that no lodgement trigger exists.
A Worked Example for a New Migrant Professional
Wei moved to Sydney during the income year and started professional employment after arriving. He earned A$15,000 in Australian salary before year-end, and his employer withheld A$600 in PAYG tax. Wei also received A$4,000 from overseas work completed before moving to Australia. He isn't sure whether he became an Australian resident when he arrived.
Wei shouldn't decide based only on the A$15,000 Australian salary. If he is an Australian resident for the relevant period, his taxable income and the treatment of the overseas amount need to be reviewed together. If his total taxable income remains below A$18,200, the amount withheld may still mean he needs to lodge, particularly if he wants to reconcile the PAYG withholding or claim a refund.
If Wei is a foreign resident, the analysis changes. A foreign resident with A$1 or more of Australian taxable income generally has a lodgement obligation. His Australian salary may therefore be enough to require a return, even though his Australian earnings alone are below the resident tax-free threshold.
The overseas income also requires care. Depending on when Wei earned it, where the work was performed, his residency status and any applicable Australian rules, it may or may not be assessable in the same way. Wei should keep employment records, withholding details and evidence about his move and work locations. The ATO's residency position is determined under tax rules, not by the visa held.
For a cross-border situation, Wei could review Australian cross-border tax rules and obtain advice before lodging. A professional assessment may also need to consider whether a return should cover a part-year residency period and how foreign income should be disclosed.
Wei's outcome can change because of one fact. Tax withheld may require action below the resident threshold, while foreign-resident status can create a lodgement obligation from A$1 of Australian taxable income.
Your Next Steps for Lodging This Year
Start with records rather than the return form. Gather your income statements, payment summaries where relevant, bank interest records, dividend statements, business income records and receipts supporting deductions. If you moved countries or worked overseas, keep documents showing dates, locations, employment and withholding.
Then choose the lodgement method that fits the complexity of the return. Eligible individuals may use myTax online. A registered tax agent can help with residency, business, PSI, investment or foreign-income questions. Paper lodgement may also be available, although it can be less convenient for a return with multiple income categories.
Individual lodgement is generally due by 31 October, unless you engage a registered tax agent before that date. A registered agent may have access to later lodgement arrangements, but you should contact the agent before the deadline and confirm the arrangement rather than assume an extension applies.
Use this tax return checklist to organise the information before starting.
- Collect records: Income statements, interest, dividends, business documents and deduction receipts.
- Check residency: Review whether you were an Australian resident or foreign resident for tax purposes.
- Identify triggers: Consider withholding, business activity, reportable amounts and special visa rules.
- Confirm timing: Note the general 31 October deadline and contact an agent before that date if needed.
- Notify the ATO: Submit a Non-lodgment advice if no return is required and no exemption applies.
Frequently Asked Questions About Tax Returns
Can I get a refund if I earned under A$18,200?
Possibly. If you're an Australian resident below the threshold but tax was withheld from your income, lodging may allow the ATO to reconcile that withholding and determine whether a refund is available. A refund isn't automatic, and the result depends on your full income, deductions, residency and other relevant information.
What if I did not work at all this year?
Not working doesn't automatically settle the question. You may have received interest, dividends, foreign income or other amounts, or you may have carried on a business without earning revenue. If no lodgement trigger applies, you may generally need to submit a Non-lodgment advice so the ATO knows why no return was lodged.
Does my company or trust have to lodge even at a loss?
Generally, an entity's obligation is separate from whether it made a profit. A company or trust may need to lodge because of its structure, activity and annual reporting requirements. A sole trader also generally needs to lodge where they carried on a business, including where the business made a loss or earned no income.
When should I see a registered tax agent?
Consider speaking with a registered tax agent before lodging if you're a new migrant, foreign resident, working holiday maker, sole trader, PSI earner or business owner. Advice may also be sensible where you have overseas income, multiple entities, reportable benefits or uncertainty about whether a Non-lodgment advice is appropriate.
Whether you need to lodge depends on residency, income type, withholding and business activity, not income alone. The right approach depends on your circumstances, records and the relevant income year.
If you would like clarity on how these principles may apply to your own circumstances, contact Everglow on 1300 913 929 or email contact@everglow.au.
To book directly: Book a meeting with Panbo.
Tags: tax return, ATO, non-lodgment advice, Australian tax, tax agent, tax residency, sole trader tax, migrant tax.
