Why is my tax refund so low?

Over 14 million tax returns will be lodged in Australia this year – and for many of these taxpayers the best part of the process is the possibility of getting a big refund. 

However, many people would have noticed that their refunds in the 2023 and 2024 years were quite a bit smaller than in previous years, due to the abolition of the Low and Middle Income Tax Offset and the changes to the method of claiming expenses in relation to working from home. Assuming your circumstances haven't changed materially, your refund for the 2025 year is likely to be about the same as in 2024.

Although there has been much publicity about the drop in tax rates for the 2025 year, if you are employed, your employer would have adjusted the tax withheld from your wages to allow for this. You would have already received the benefit of the tax rate cuts in your pay during the year, rather than having to wait for the end of the year.

However, even in 2024, refunds for clients who used a tax agent were considerably higher than those for self-preparers. It pays to use a tax agent, who is able to dig for legitimate deductions and offsets that you might not have known you were entitled to, feeding into a bigger refund!

Here we’ll answer the four biggest questions about tax returns this year:

How will the new tax rates impact my 2025 tax refund?

If your are employed, you would have received the benefit of the tax cuts during the year, as your employer would have withheld less tax from your wages, so the tax cuts will not impact your tax refund. 

What will happen to my tax refund in 2025?

If your particular circumstances remain the same as last year, it should be about equal to the 2024 figure. 

If you are working from home, the fixed rate has increased to 70 cents per hour, however don’t forget those additional compliance requirements to claim this deduction. If you haven’t got the substantiation required, you might not be able to claim, even if you did work from home for part or all of the year!

What should I do if my tax refund is lower than I expected?

The first thing you need to do is to closely review the tax return and double check whether it’s aligned with your expectations. If not, you need to take action. 

The best way to do this is to speak to an experienced tax professional, such as one of the knowledgeable tax consultants here at H&R Block. If you completed your tax return on your own using a service such as myTax or have lodged your return through another tax agent, then you can get a second opinion by using H&R Block’s FREE* second look assessment service, where we will review your return and provide you with advice on how to proceed. If you’re a current H&R Block client, you can approach your local office or call 13 23 25 to get immediate assistance and advice.

We’re here to help you get the best possible result and if there is indeed an issue with your return such as an error or missing deductions that should have been included, we will help you to lodge an amendment to make sure you get the correct result. 

How can I boost my tax refund next year?

Working with a trusted tax consultant is the number one way to make sure you get every dollar you’re entitled to at tax time this year and in the future. 

There are so many deductions that many people miss – such as the depreciation of home office furniture and computers, superannuation contributions, education expenses and fees for financial advice – so it really does pay to get someone in the know to help you complete your return and to make sure you have proof of purchase for everything you include. 

Our team here at H&R Block will make sure you get ALL the tax deductions you’re entitled to, which will help you to secure the maximum possible refund going forward.

Updated June 2025