The big idea
Refund = tax withheld − tax owed. Employers use the ATO withholding tables, which are designed to get close to your real tax. If you have one job all year and few deductions, the withholding is almost spot on — so the refund is small. That means the system worked.
The pre-filled example
$85,000 from one employer, $17,988 withheld, only $300 of deductions: the tax owed is $17,892, so the refund is just $96 — the 32% saved on the deductions.
Six common reasons for a small (or negative) refund
- Withholding was already accurate. Most common, and nothing is wrong.
- Two jobs at once. If you claimed the tax-free threshold with both employers, too little was withheld and you may owe money.
- A HELP debt you didn’t tell your employer about, so no HELP was withheld during the year.
- Untaxed income — interest, dividends, side gigs, rent — is added at tax time with nothing withheld.
- Medicare levy surcharge if you earn over about $101,000 (single) without private hospital cover.
- Fewer deductions than last year, e.g. less working from home.
What about the tax cuts?
The 16% rate applied from 1 July 2024 and the 15% rate from 1 July 2026 were built into the withholding tables from day one, so they show up in each pay, not in the refund. The old low and middle income tax offset (up to $1,500) ended in 2021-22, which is why refunds fell for many people from 2023.
Want a refund next year?
You can’t “earn” one without overpaying, but you can keep good records so you don’t miss deductions: a simple diary of work-from-home hours, receipts in a folder or the ATO app, and a note of donations.
Checking your own numbers
Open your income statement in myGov and compare “tax withheld” with what the calculator shows as tax assessed. If the two are close, your refund will be small, and that’s fine. If withholding looks too low, check that you only claimed the tax-free threshold with one employer and that you told your employer about any HELP debt — both are changed on a withholding declaration form.
If you have untaxed income such as rent or freelance work, consider paying PAYG instalments or putting some money aside each month, so tax time doesn’t bring a surprise bill.
Key 2025-26 figures (checked 5 November 2026)
| Item | Figure |
|---|---|
| Tax-free threshold | $18,200 |
| Rates | 16% / 30% / 37% / 45% |
| Low income tax offset | Up to $700 |
| Medicare levy | 2% (nil to $28,011 single) |
| HELP threshold | $67,000 (marginal 15% / 17%) |
| Self-lodgement deadline | 31 October 2026 |
FAQ
Why is my tax refund so small?
Usually because your employer already withheld close to the right amount of tax. A refund only comes from overpaid tax or deductions.
What refund would I get on $85,000 with $300 of deductions?
About $96 if $17,988 was withheld in 2025-26.
Why do I owe tax this year?
Common reasons: two jobs claiming the tax-free threshold, a HELP debt not withheld, untaxed income, or the Medicare levy surcharge.
Sources (checked 5 November 2026): ATO “Tax rates – Australian resident” (2025-26 and 2026-27), ATO low income tax offset, ATO “Medicare levy reduction for low income earners” (2025-26 thresholds $28,011 / $35,013), ATO “Study and training support loans rates and repayment thresholds” (2025-26 and 2026-27), Treasury Laws Amendment (More Cost of Living Relief) Act 2025 (15% from 1 July 2026).