Glossary of Tax Terms

  • Capital Gains Tax (CGT) :

    The tax you pay on profits made from selling assets like property or shares. Holding assets for more than 12 months typically qualifies for a 50% discount on the CGT.

  • Deductions :

    Specific expenses that can be subtracted from your taxable income, reducing your overall tax burden.

  • Fringe Benefits Tax (FBT) :

    Tax paid on benefits provided to employees, such as company cars or health insurance.

  • Goods and Services Tax (GST) :

    A 10% tax on most goods and services sold in Australia. Businesses registered for GST can claim credits for GST paid on business expenses.

  • PAYG :

    “Pay As You Go” withholding refers to the process where employers deduct tax from wages and send it to the ATO on behalf of employees.

  • Taxable Income :

    Your income after all eligible deductions and exemptions are applied, used to calculate your tax liability.