41 terms No jargon left unexplained

Tax and super words, in plain English

Australian tax writing assumes you already know the vocabulary. Every calculator on this site keeps the official term — so you can search for it and check it yourself — and this page says what it actually means.

Pay & tax

Taxable income: What is left of your income after the deductions you are allowed to claim. The tax brackets are applied to this figure, not to your salary.
Marginal rate: The rate you pay on your next dollar — not on all of it. Australia taxes you in slices, so only the income inside each bracket gets that bracket's rate.
Tax offset: A discount on the tax you owe. Different from a deduction: a deduction lowers your income, an offset lowers the bill itself.
Medicare levy: 2% of your taxable income, on top of income tax, to pay for Medicare. Most people pay it.
Medicare levy surcharge: An extra 1–1.5% for higher earners who do not have private hospital cover. It is not the same thing as the Medicare levy.
Low income tax offset: A discount on the tax you owe if you earn under about $66,667. It reduces a bill — it cannot create a refund on its own.
PAYG withholding: The tax your employer takes out of each pay and sends to the ATO, so you are not hit with one big bill at tax time.
Base rate entity: The ATO's name for a company small enough — and earning enough of its money from actually trading — to get the 25% company tax rate instead of 30%.
Payroll tax: A state tax on the wages a business pays its staff. It is the employer's tax. Employees never pay it directly.

Superannuation

Super guarantee: The minimum your employer must pay into your super: 12% of your earnings, paid on top of your salary, not out of it.
Concessional contributions: Super money that has not been taxed yet — your employer's 12%, anything you salary sacrifice, and personal contributions you claim a deduction for. It is taxed at 15% going in.
Non-concessional contributions: Super money you have already paid tax on, usually straight from your take-home pay. No tax going in, and none coming out in retirement.
Salary sacrifice: Agreeing to give up part of your salary and have it paid into super instead. This one does come out of your pay.
Preservation age: The earliest age you are allowed to touch your super: 55 to 60, depending on the year you were born. It is not the same as the Age Pension age, and it is not 65.
Condition of release: The event that actually unlocks your super — retiring after preservation age, turning 65, or leaving a job after 60. Reaching preservation age alone is not enough.
Division 293: An extra 15% tax on super contributions for people whose income plus contributions pass $250,000. It turns the 15% contributions tax into 30%.
Account-based pension: The usual retirement income stream: your super stays invested and you draw a set amount out each year.
Minimum drawdown: The least you must take out of an account-based pension each year, as a percentage that grows with your age — 4% under 65, 14% at 95.
Transfer balance cap: The most you can move out of super's savings phase and into the tax-free retirement phase.

Study loans

Repayment income: The figure the ATO actually uses to work out study loan repayments: your taxable income plus reportable fringe benefits, net investment losses, reportable super contributions and exempt foreign employment income. It is usually higher than your salary.
Reportable fringe benefits: Perks your employer has to report to the ATO — a novated lease car is the common one — even though they are not cash in your hand. They still count as income for study loans, family payments and the surcharge.
Compulsory repayment: The amount taken out of your pay towards a study loan, once you earn over the minimum threshold.
Indexation: The yearly increase added to a HELP balance on 1 June. It is based on inflation, not on interest — the balance grows rather than the debt being charged interest.

Family & benefits

Adjusted taxable income: The income figure Centrelink uses, usually shortened to ATI. It starts with your taxable income and adds things like reportable fringe benefits and salary sacrificed amounts.
Means test: Centrelink's income and assets tests. As either one goes up, the payment comes down.
Taper rate: How fast a payment drops as your income rises — for example 20 cents for every extra dollar.
Free area: The amount of income you can have before a payment starts being reduced at all.
Child Care Subsidy: The government's share of your child care fees, worked out as a percentage. It depends on your family income, how much you work or study, and the type of care.
Activity test: The hours you — and your partner — work, study or look for work. It decides whether you get 72 or 100 subsidised hours of care a fortnight.
Family Tax Benefit Part A: The per-child payment, paid on top of your income and reduced once your family income passes the free area.
Family Tax Benefit Part B: A separate payment for single parents and for families with one main earner. It has its own income test based on the lower earner.

Property & renting

Land tax: A state tax on the total value of the land you own — the land, not the buildings — above a threshold. Your home is usually exempt; investment property is not.
Capital works deduction: A tax deduction for the construction cost of a rental property, spread over 40 years at 2.5% a year (or 4% for certain older buildings).
Depreciation: A deduction for the things inside a rental property wearing out — carpets, appliances, hot water systems.
Negative gearing: When a rental property costs more to hold than it earns in rent. The loss reduces your other taxable income, which lowers your tax.
Rental bond: The refundable deposit a tenant pays at the start of a lease. Each state and territory caps how much can be asked for.

Visas & migrants

Australian resident for tax: The test that decides which tax scale applies to you. It is about your circumstances and intentions, not the visa in your passport.
Foreign resident: Someone who is not an Australian resident for tax purposes. Taxed at 30% (or 32.5%) from the first dollar, with no tax-free threshold.
Working holiday maker: Someone on a subclass 417 or 462 visa. Taxed at 15% from the first dollar, with no tax-free threshold.
Medicare levy exemption: A way to avoid the 2% Medicare levy if you are a temporary resident who cannot use Medicare — but you have to be able to prove it.
Departing Australia superannuation payment: Claiming the super you built up in Australia after you leave, if you were a temporary resident. Taxed at 65% on working holiday visas.

If a word is missing

This list covers the terms our calculators use. If you meet one we have not explained, tell us and we will add it — hello@aussiecalculators.com.

These are plain-English explanations of what a term means, not advice about your own situation. Where a figure matters, check it against the source named on the calculator page.