At the end of each income year the Australian Taxation Office (ATO) sends your notice of assessment (NOA). The NOA shows:
- your taxable income
- how much tax you owe?
- any credits for tax already paid
- the amount you will get back as a refund (if applicable)
If your NOA shows you owe money instead of getting a refund, here are key reasons why, plus what you can do about it.
Common Reasons for a Tax Bill
You may receive a bill if any of these apply:
- A tax offset you used to qualify for is no longer available or you are no longer eligible (for example, the low and middle income tax offset ended 30 June 2025)
- Not enough tax was withheld from your income during the year. This may happen if you:
- moved into a higher tax bracket (e.g. via promotion)
- had multiple jobs and claimed the tax-free threshold more than once
- received government allowances or payments and withholding wasn’t adjusted
- You have a student debt (such as a HECS or HELP debt) and your income or repayment rate increased during the year. If your employer didn’t take this into account, more tax may be due.
- You are running your own business (sole trader), or receiving income from a partnership or trust and you haven’t paid enough via PAYG instalments or withholding.
What To Do If You Receive a Tax Bill
If you get a bill on your NOA:
- Check the due date on your NOA and pay by that date to avoid interest and penalties.
- If you can’t pay in full, contact the ATO quickly. You may be eligible for a payment plan tailored to your situation.
- Review your income, offsets, deductions and withholding details. Ensure your employer or payer has correct information (for example, you told them about a HECS/HELP debt).
How To Prevent a Tax Bill Next Year
You can take steps now to reduce the probability of owing tax next year:
- If you have one main job, check you are claiming the tax-free threshold from that job only.
- If you expect higher income (from business, side jobs, dividends, or investment), consider increasing tax withheld or entering voluntary PAYG instalments.
- Make tax prepayments if you anticipate owing. The ATO will hold the amount against your future liability.
- Use the ATO’s income tax calculator to estimate your tax liability then set funds aside during the year.
Why It Matters For You
Receiving a tax bill can affect your cash flow and increase stress. But by understanding why you might owe tax and by acting ahead, you can:
- avoid unexpected large payments at year end
- reduce interest or penalties from late payment
- improve your overall tax planning strategy and budget more effectively
If you are unsure why you have received a bill or if you’d like help setting up a strategy to minimise your tax liability next year, contact us at RG Partners & Associates. We can review your withholding, instalments, income streams and tax planning approach with you.
Reference: Australian Taxation Office
