TAX ESSENTIALS FOR EMPLOYEES • STEP 2 OF 4
See It: Sarah's Tax Discovery
An investment in knowledge pays the best interest.
— Benjamin Franklin
Follow Sarah's tax return journey and see exactly how much she saved by claiming deductions.
Your Learning Journey
Your Learning Journey
This Step Takes: 20 minutes
Follow Sarah's journey, explore salary sacrifice benefits, and learn from real deduction examples.
What You'll Learn
See exactly what deductions a real employee can claim and how much they save. Understand the powerful impact of salary sacrifice on long-term wealth.
Real deduction examples and salary sacrifice impact on your wealth.
2015
Meet Dave, a plumber earning $80k/year as a sole trader. He's ready to grow his business.
What Sarah Claimed (Best Path)
Here's the exact breakdown of Sarah's deductions that generated a $1,887 refund.
Work From Home
$1,536
Fixed rate method: 3 days/week × 8 hours × 48 weeks × $0.67/hour
Car & Travel
$1,700
Cents per km method: 2,000 km to client meetings × $0.85/km
Phone & Internet
$480
50% work use of phone plan ($50/mo) + internet ($30/mo)
Self-Education
$1,200
Digital marketing course directly related to current role
Total Deductions: $4,916
Tax Refund: $1,887
That's $1,887 that was already withheld from her pay, now back in her pocket!
The Salary Sacrifice Strategy
Sarah discovered an even bigger opportunity: salary sacrificing into super.
The Salary Sacrifice Secret
Sarah earns $85,000. She salary sacrifices $10,000extra into super each year. Here's what happens...
Without Salary Sacrifice
Annual Take-Home
$65,208
Super After 10 Years
$19,229
(Just employer SG contributions)
With Salary Sacrifice
Annual Take-Home
$58,658
(-$6,550 less cash)
Super After 10 Years
$38,900
(+$19,671 more!)
The Magic: Where the Benefit Comes From
Tax Saved
$3,450
Per year
Super Growth
$19,672
After 10 years
Net Benefit
$16,572
Total gain
The Secret: You pay 15% tax on super contributions instead of your marginal rate (32.5%). Plus, your super grows tax-free!
Assumptions: 7% annual super return, 10-year timeframe. Actual results vary based on market performance and personal circumstances.
Key Insights
Track Everything
Use ATO Methods
Think Long-Term
💡 The Average Australian Misses $2,000+ in Deductions
ATO data shows most employees under-claim deductions because they don't track expenses or understand what's claimable. Don't be average!
Tax-101 for PAYG - See It: Complete
- Sarah saved $1,887 by claiming WFH, car, phone, and education deductions
- The difference between owing $317 and getting $1,887 back was 30 minutes of tracking
- Salary sacrificing $10k/year into super saves $2,700 in tax while building retirement wealth
Homework
Which of Sarah's deductions apply to your situation? What expenses are you currently not tracking?
Start a simple spreadsheet with three columns: Date, Expense Type, Amount. Add one work expense you paid this month.
What's Next?
20 minutes