Payroll Myth #1 – “but I am being offered a free tax return…”

This one we hear often!

Payroll companies and recruitment agencies will often offer a “free tax return” as part of their services. 

This may be convenient and appropriate for individuals earning less than $50,000 but it is not generally recommended for individuals in the higher income brackets looking to optimise and take advantage of their financial situation.

The tax return being offered is extremely basic. It is an almost automated procedure that you perform yourself using the ATO website (Lodge your tax return online with myTax | Australian Taxation Office (ato.gov.au))

Many employees in the higher tax brackets will often have a different financial situation which may include such things as;

• An Investment Property
• Work from home claimable expenses
• Depreciation of assets

These and other situations should be examined by an accountant or a tax return expert who can give you sound financial advice and find any tax optimisations for you.

This is not the role of a payroll company. Payroll companies and recruitment agenciers are experts in optimising your pay or finding you a role. Not preparing your tax return.

Another disadvantage of having the same people do your payroll and tax return is that you don’t get another set of eyes looking over your financial situation. 

It is strongly recommended to get another person’s take on your tax.

In short, your tax return is something you should be looking to optimise not automate.