A tax refund is the amount the ATO returns to you when the total tax withheld from your income during the year is more than your actual tax liability after deductions and offsets are applied. ATO systems compare tax withheld with tax payable based on your taxable income and entitlements to determine if you receive a refund.
How to Get a Bigger Tax Refund in 2026?
Last updated:
12 Jan 2026
Originally published:
Jul 2020
Getting a bigger tax refund at a glance: In Australia, your tax refund depends on how much tax you’ve paid and the deductions and offsets you can claim. You can potentially increase your refund by claiming all legitimate ATO-approved deductions (such as work-related costs and eligible expenses) and applicable tax offsets when lodging your return.
The past two years have been challenging for many Australians, with rising cost-of-living pressures felt nationwide. It is understandable that people may be hoping for some financial relief, including a larger tax refund. That said, there have been no significant changes to tax laws for employees this year. If your circumstances remain largely the same as last year, your tax refund is also likely to be similar.
How Tax Refunds Work in Australia
Over 14 million people lodge a tax return each year in Australia. Of those who receive a refund (approximately two-thirds), self-preparers received an average of $2,576 in 2022, while tax agent clients received an average of $3,550. This substantial difference highlights the benefits of seeking professional assistance in maximising your refund.
Choosing to lodge your return through an agent can also provide you with an extension beyond the usual October 31st deadline for self-lodgers. If you are not registered with a tax agent by 31st October and you are unable to lodge your return by this date, you may be liable to a late lodgement penalty.
If you've missed the deadline and want to minimise (or eliminate) any potential penalties, it is worth gathering your tax return information and heading to H&R Block. Our Tax Experts can prepare your return with minimal stress and provide expert advice tailored to your situation. The return typically takes approximately two weeks to process, and your agent can keep you updated on its progress.
What Affects Your Tax Refund Amount in Australia (Income, Deductions, Offsets)
Several factors contribute to your tax refund amount, including:
- Taxable income from wages, salary, investments, rental income: You pay tax to the government each year on all forms of income, including wages, business profits and investment returns, and it can also apply to income from the sale of assets such as a property or shares. You don’t have to pay taxes on the first $18,200 that you earn, but anything above this will be taxed on a progressive tax scale, which means the percentage increases the more you earn.
- Tax deductions which can reduce the amount of your taxable income: There are various deductions that can effectively decrease your tax liability. Knowing which deductions you can legitimately claim for your occupation is also an important step to getting the tax refund you deserve.
- Tax offsets or tax credits: There are several tax offsets or credits accessible that have the potential to lessen your tax liability. One of these is the seniors and pensioners tax offset.
- Medicare Levy Surcharge: If your income exceeds the relevant income threshold and you do not have an appropriate level of private patient hospital cover for the full year, you will be liable to pay the Medicare Levy Surcharge. To avoid the surcharge, you must have the appropriate level of cover.
- Residency Status: Your residency status for tax purposes can affect the tax you pay and amount of refunds you are entitled to.
While these are some key factors, there are many others to consider. For lesser-known deductions, consulting with H&R Block can ensure you're making the most of your claims.
How to Maximise Your Australian Tax Refund This Year (ATO-Compliant Deductions)
It's important to seek proper guidance and claim all eligible deductions to maximise your tax refund.
Some common deductions you might be eligible to claim include:
Some common deductions you might be eligible to claim include:
- Phone and Internet Services
- Charitable donations
- Work-related car expenses
- Work from home deductions
- Costs of education related to current job.
Remember, accuracy is key. Falsifying or exaggerating claims can get you into serious trouble with the ATO and will result in you having to pay back any excesses and may possibly also lead to additional fines and penalties.
To make sure you tick all the right boxes and maximise your tax refund, speak to one of our Tax Experts at H&R Block. Our Tax Experts can walk you through the tax refund process with ease. Best of all, our preparation fee is tax deductible.
With over 400 offices nationwide, expert help is just around the corner. You can choose to lodge your return with one of our offices, lodge online by yourself or lodge online with an expert – your tax return, your way.
Our extensive range of other services including SMSF, bookkeeping, accounting and financial services are also available through a network of offices around Australia, at competitive rates.
Call 13 23 25 for details or find your nearest office and book an appointment online.
To make sure you tick all the right boxes and maximise your tax refund, speak to one of our Tax Experts at H&R Block. Our Tax Experts can walk you through the tax refund process with ease. Best of all, our preparation fee is tax deductible.
With over 400 offices nationwide, expert help is just around the corner. You can choose to lodge your return with one of our offices, lodge online by yourself or lodge online with an expert – your tax return, your way.
Our extensive range of other services including SMSF, bookkeeping, accounting and financial services are also available through a network of offices around Australia, at competitive rates.
Call 13 23 25 for details or find your nearest office and book an appointment online.
Frequently Asked Questions
Claiming all eligible deductions reduces your taxable income, which can lower your tax payable and may increase your refund if the tax withheld throughout the year exceeds your final tax liability. ATO guidance lists work-related, investment-related, and other deductible expenses you can claim.
You can claim deductible work-related expenses that directly relate to earning your income, such as vehicle and travel costs, tools and equipment, uniforms and other work items, and working-from-home expenses. Each claim must meet ATO eligibility criteria and you must keep records.
Tax offsets reduce the amount of tax you need to pay, which can increase your refund if your total tax payable after offsets is less than the tax withheld. Common offsets include the low income tax offset and private health insurance offset. Many offsets must be claimed in your tax return and some are automatically applied by the ATO.
Yes. To claim a deduction, you generally need records such as receipts, invoices, or logs that show you incurred the expense and that it relates to earning your income. The ATO requires substantiation for deduction claims, and without adequate evidence a claim may be disallowed.
Yes. If the amount of tax withheld from your income throughout the year exceeds what you owe after calculating taxable income, deductions, and offsets, the ATO will refund the difference. If too little was withheld, you may have a tax bill instead of a refund.
Yes. If you do not claim the tax-free threshold correctly for each job, or if insufficient tax is withheld across multiple income sources, your overall withholding may not cover your true tax liability, which can reduce or eliminate your refund.
No. The timing of your lodgment does not change the amount of your refund. Your refund amount is based on your income, deductions, tax offsets, and tax withheld for the income year, regardless of when you lodge within the allowable lodgment period.
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