Why do I owe the ATO money on my tax return?

The most common reasons

• Two jobs or two payers. If the tax-free threshold was claimed with more than one employer, each withheld too little. The return adds all income together and the shortfall appears.
• A HELP or other study loan. Repayments are worked out on your total income at tax time. If an employer was not told to withhold for the loan, or a second income pushed you into a higher repayment band, the repayment lands in the return.
• Medicare levy surcharge. If your income is over the threshold and you did not hold private hospital cover for the full year, the surcharge is added at assessment.
• Private health insurance rebate. If the rebate was claimed as a premium reduction at a higher tier than your income allowed, the difference is clawed back.
• Side income with no tax withheld. Rideshare, contracting, a small ABN business, bank interest, dividends or crypto gains are all taxed, but nothing was withheld along the way. If the ATO has not yet put you on PAYG instalments, the whole year's tax arrives at once.
• A capital gain. Selling shares, crypto or an investment property adds the gain to your income for that year.
• Fewer deductions than last year. Working from home less, or an expense that no longer qualifies, changes the result even if nothing else did.
• An existing debt. If you were expecting a refund and got a bill or a smaller refund, check whether the credit was offset against an older debt on your account.

How to see what changed

Your notice of assessment shows taxable income, tax on that income, offsets, levies and surcharges, and the credits for tax already withheld or paid. Comparing it line by line with last year's notice usually points straight at the cause. Then check the income statements in ATO online services to confirm how much each payer actually withheld, and open the statement of account to see whether a refund was reduced by an offset. Our page on how to check what you owe walks through the screens. If a figure looks wrong, our guide to a debt you do not recognise covers what to do.

What to do if you cannot pay it

The due date is on the notice of assessment. From that date, general interest charge at 11.43% p.a. applies to whatever is unpaid, compounding daily, and interest incurred from 1 July 2025 is not deductible. The bill does not go away, so the practical question is how to pay it.

• A payment plan can be set up online for debts up to $200,000, and a plan agreed before the due date avoids the debt being treated as overdue.
• If the cause is structural, fix next year now: tell one employer to stop claiming the tax-free threshold, ask for study loan withholding, or start voluntary PAYG instalments for side income.
• If paying would leave you unable to cover basics, ask about serious hardship release, which is available to individuals for income tax debt.

For a bigger bill than you can manage, our guide to a tax bill you cannot pay sets out the options in order.

What to do next

1. Compare this year's notice of assessment with last year's, line by line, to find where the difference comes from.
2. Check your income statements and statement of account in ATO online services for withholding gaps or an offset against an older debt.
3. If you cannot pay by the due date, set up a payment plan before the date rather than after, and adjust withholding so next year is different.

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