Why do I owe tax? Common reasons for a tax bill

Updated 13 November 2026.

A tax bill means less tax was withheld during the year than you owed. The withholding formulas assume one job and no other income, so anything outside that can leave a gap.

1. Claiming the tax-free threshold from two jobs

Each employer then assumes your first $18,200 is tax-free. With two $40,000 jobs in 2026–27, both claiming it, $8,008.00 is withheld but the tax on $80,000 is $16,120.00: a bill of about $8,112.00. Claim it from your main job only. See tax on a second job.

2. A HELP debt your employer doesn't know about

If you don't tick the study loan box on your withholding declaration, nothing extra is withheld. On a $90,000 salary the compulsory repayment is $3,070.80, so you'd owe about $3,046.80. Use the HELP repayment calculator.

3. Income with no tax withheld

Interest, dividends, rent, ABN or side-hustle income and capital gains are all taxable but usually have no tax taken out. Put money aside as you earn it.

4. No private hospital cover on a higher income

Singles earning over $105,000 without hospital cover pay the Medicare levy surcharge, which isn't withheld from pay.

5. Changing jobs and claiming the threshold at both

Usually fine if the jobs don't overlap, but if they do, or you also had Centrelink payments, too little may have been withheld.

6. Fewer deductions than last year

Changes to work-from-home or car claims can turn last year's refund into a bill even with the same income.

7. A withholding variation or a lower tax-free amount

If you asked for less tax to be withheld, or your employer used the wrong tax scale, the gap shows up at tax time.

How to avoid a bill next year

• Update your withholding declaration with each employer (threshold and study loan).
• Ask your employer to withhold extra; employees can agree to an upwards variation.
• Estimate your result during the year with the tax refund calculator.

If you can't pay a bill in full, the ATO offers payment plans.