You may have to pay tax on your payments.
Paying tax on your payment
You can choose to pay tax on your payment if you get a taxable Centrelink payment.
We don’t automatically take tax from taxable payments. You can ask us to do this for you. We call this a tax deduction.
You can use the Australian Taxation Office (ATO) tax withheld for individuals calculator to work out the amount of tax that we should deduct from your payment.
If we deduct tax from your payment, you must lodge a tax return with the ATO.
Payment summary
If we deduct tax from your payment, you’ll be able to see it on your payment summary. Your payment summary shows:
- the total payment amounts you got from us for the financial year
- any tax we deducted from these payments
Deducting tax from your payment
You can ask us to make regular tax deductions from taxable Centrelink payments. This means you pay tax in smaller amounts throughout the year, instead of a lump sum after the end of the financial year.
Setting up deductions
You can ask us to deduct tax when you submit a claim by ticking the option in the claim.
You can choose for us to deduct the tax as a percentage of your total taxable payments or a dollar amount.
You can also manage your deductions at any time.
Taxable payments and managing your tax deductions
How you set up a tax deduction depends on the taxable payment you get from us.
| If you get | you can set up your tax deduction |
|---|---|
| ABSTUDY - Living allowance for students and Australian Apprentices if you’re 16 years or older |
|
| Age Pension | |
| Austudy | |
| Bereavement Allowance | |
| Carer Payment – if you or the care receiver is of age pension age | |
| Newstart Allowance | |
| Parenting Payment | |
| Partner Allowance | |
| Sickness Allowance | |
| Special Benefit | |
| Widow Allowance | |
| Wife Pension – if you or your partner is of age pension age | |
| Youth Allowance – if you’re 16 years or older | |
| Disability Support Pension – if you’re age pension age |
|
| Dad and Partner Pay |
|
| Disaster Recovery Allowance | |
| Ex-gratia Income Support Allowance – where the payment has been deemed taxable | |
| Farm Household Allowance | |
| Income Recovery Subsidy | |
| Parental Leave Pay – Department of Human Services delivered payment only Widow B Pension |
The amount we can deduct tax from includes your taxable Centrelink payment and any of these add on payments you receive:
- National Work Experience Programme
- Green Army Supplement
- Remote Jobs and Communities Programme Supplement
- Work for the Dole
- Basic Pension Supplement
- Additional Assistance - regular
- Living Allowance, Term or School Boarder
- School Fees Allowance Group 2 or Board
- Bereavement Lump sum above the tax free threshold
Find out more
Read more about personal taxation advice on the ATO website.