10 Australian Tax Offsets To Claim in 2016

10 Australian Tax Offsets To Claim in 2016

Want to pay less in tax but don’t know how to? We’ll help you out.

There are a few different elements of your tax return that can contribute to reducing how much you owe. Tax offsets are one of those. Alone, they will not get you a tax refund. However, offsets can decrease your tax payable to zero.

Let’s talk about a few that should do the trick for you.


Do you earn less than $66,667?

The low income tax offset (LITO) could be right for you. Although the tax-free threshold applies to everyone, this offset takes it a step further to help out those earning less than $66,667.

The following rates apply to Australian residents over 18 years old for 2015-2016:

  • If your taxable income is $0-$37,000 then your offset amount will be $445.
  • If your taxable income is between $37,001 and $66,666 then your offset amount will be $445 less 1.5% of excess over $37,000.


Do you have private health insurance?

You may qualify for the private health insurance rebate. After lodging your tax return, the ATO will determine how much of an offset they will grant you. Once this determination is made, you’ll be able to choose whether you would like to receive that amount:

  • via your tax return with the ATO; or
  • via a reduced premium.

This rebate is based on your age and income level. The ATO provides a private health insurance rebate calculator on their website to work out how much of a rebate is available to you.


Do you live in a remote area?

Take a look at the zone tax offset. To be eligible for this offset, you’ll need to have lived or worked in one of the following for at least 183 days:

  • Zone A
  • Zone B
  • Special Area

Not sure which zone you’re in? Not to worry. The ATO provides a list for you in relation to your state and location.


Do you serve overseas?

If so, take a look at the overseas forces tax offset. You could be eligible to claim this offset if you meet both of the following:

  • You served in a specified overseas locality for 183 days or more during the tax year as a part of Australia’s Federal Police, Defense Force, or UN armed forces.
  • The income you’ve earned relating to that deployment was not specifically exempt from tax.

The ATO provides an up-to-date list of specified overseas localities that this offset applies to.


Do you have at least 65 years under your belt?

Welcome to the golden years! The seniors and pensioners tax offset (SAPTO) could be just what you’re looking for. This tax offset is available to the following:

  • Age pensioners and service age pensioners
  • Self-funded retirees of pension age

If one of these sounds like you, then check out the ATO SAPTO calculator. It will help you work out the amount you’ll get back based on age and income.


Do you receive government benefits?

Those payments may qualify you for the beneficiary tax offset. Whether you’re receiving allowances, social security payments or other benefits, this offset may be just the right one for you to reduce your tax liability. Popular benefits include (but are not limited to):

  • Austudy payment
  • Newstart Allowance
  • Youth Allowance
  • Parenting Payment
  • Widow allowance
  • Interim income support payment

If you qualify for both this offset and the SAPTO, you may only choose one. You can use the ATO calculator to see which would benefit you most.


Do you care for a relative throughout the year?

Your support might just land you the qualifications to claim the invalid and carer tax offset. You might remember there being about 8 different dependent offsets available. Since 2013, all of the following offsets have been consolidated down into just one:

  • Invalid spouse
  • Invalid relative
  • Carer spouse
  • Parent/parent-in-law

Since these offsets were separate in the past, you are able to claim more than one offset amount in certain cases. The ATO lists out specific qualifications along with an offset calculator to help you see how much you will qualify for.


Do you have medical bills piling up?

Take a look at the new requirements to claim the net medical expenses tax offset. The chart below will let you know how much you can claim depending on your family status and adjusted taxable income.

Family Status at 30 June:ATI threshold (combined if married):You can claim:
Single$90,000 or less20% of net medical expenses over $2,218
SingleAbove $90,00010% of net medical expenses over $5,233
Family (with a spouse, dependent children or both)$180,000* or less20% of net medical expenses over $2,218
Family (with a spouse, dependent children or both)Above $180,000*10% of net medical expenses over $5,233

* add on $1,500 to your ATI for each additional child dependent after the first


Do you make contributions to your Super Fund or retirement?

Whether you make these on behalf of yourself or your spouse, you might just be in luck! There are two offsets that could fit the bill (or reduce it in your case):

The Super Income Stream Tax Offset

You may be entitled to this offset if you receive income from an Australian super income stream. The offset would be in the amount of either:

  • 15% of the taxed element, or
  • 10% of the untaxed element.

The Super Contributions on Behalf of your Spouse Tax Offset

Did you make contributions to a super fund or RSA on behalf of your spouse, who is earning a low income or is unemployed? This offset could entitle you to claim up to $540 per year if all of the following qualifications apply to you:

  • When making the contributions, you and your spouse were not permanently living separately.
  • Contributions were not deductible to you.
  • You and your spouse were Australian residents.
  • The sum of your spouse’s assessable income, total reportable fringe benefits, and reportable employer contributions was less than $13,800.
  • Contributions were made to a fund that was a complying super fund for the income year in which you made the contribution.


Did you see a tax offset that applies to you?

Great! So what are you waiting for? Get started on your tax return today! If you have any questions about these offsets or others, feel free to reach out to our tax team via email, or call our phone support at 1300 ELODGE (356 343).


Image by lanstrup on 123rf

Tags: , , , , , , , , , , ,

12 Responses to “10 Australian Tax Offsets To Claim in 2016”

  1. Warren austin says:

    I have a 4 year old daughter that lives with me now and im a single dad ..i earn under 50,000 a year ..do i get a tax rebate and if so how do i claim..

  2. Tax Advisor says:

    You may be eligible for the low-income tax offset, as you have expressed that you ar earning under $50,000 a year. It would be best to start on our website and after you have entered in all of your information, you will be able to claim specific credits, or they may automatically be credited to you.

  3. Mai says:

    I earn almost 40,000 a year. I have one 8 months baby and my wife is unemployed for a year. I have to take care all of us. Can I get tax offset for this situation? We are not Australian citizens.

  4. Tax Advisor says:

    Hello Mai,

    You may qualify for the low-income tax offset (LITO) if you meet all requirements. Since your taxable income is between $37,001 and $66,666 then your offset amount will be $445 less 1.5% of excess over $37,000. Get started on your return to see if your qualify.

  5. Tina says:

    I got hit with a tax bill of $1671.95 I’m a single mum with 2 dependents under 13 I made $49076 and paid $6204 in tax does this sound right.

  6. Tax Advisor says:

    Hello Tina,

    There are many factors to consider when calculating tax due such as offsets and credits. You can use our tax calculator to determine your tax liability or tax refund or make an account to determine the amount.

  7. Piyumi says:

    I started a cert IV Leisure & health course and I paid 575 $ and my husband paid that amount since I am not working. Can he claim that amount from his tax return? His annual income is 65,000 $. Pls advise. Tks piyumi

  8. Tax Advisor says:

    Hello Piyumi,
    You can deduct self-education expenses on your tax return.

  9. Miki kostantinovic says:

    hello,I need to work out the tax offset on a gross income of $29620 and Newstart allowance of $9180.when calculating the offset,do I combine these two figures or keep them seperate?

  10. Miki kostantinovic says:

    hello,I need to work out the tax offset on a gross income of $29620 and Newstart allowance of $9180.when calculating the offset,do I combine these two figures or keep them seperate?

  11. Tariq Khalil says:


    My wife is dependent on me and she is full time student. She applied for ausstudy but got rejected, the reason that husband salary is too high. I am paying her uni fee and other expenses. Can I claim tax deductions for her education expenses? Pl guide.


  12. Leanne says:

    I am earning around $50000. I have 1 child receiving benefits as she attends Uni. She is 18. I have another child, 16 years of age still attending school VCAL of which I get Parenting Payment for. My partner and he’s son have moved in with me. My partner doesn’t work but his son does, full time. Am I elidgable for any other payments or tax offsets? Thanks Leanne.

Leave a Reply