Young Aussie's tax warning after owing the ATO money because of a simple mistake
- Worker assumed she could pay HECS in bulk
- But regular bill was due in addition when doing her tax
- READ MORE: Centrelink issues warning over tax returns
A young Australian woman has issued a warning after being hit with an ATO bill of more than $1,500 after failing to include HECS repayments in tax deducted from her pay.
Cassidy from Queensland took to social media to reveal she completed her tax return for this year but instead of receiving an expected refund, she was left with the massive bill.
'Let this be a lesson to make sure your employer is taking mandatory HECS debt repayments out of your pay so you don't end up with a tax bill,' she said.
The 22-year-old explained the problem was caused because she hadn't ticked the student loan box on her tax file number declaration form when she started a new job in the recruitment industry.
'[The tax bill] was totally my fault,' she told news.com.au this week.
She realised the error after commenters on a previous video pointed out she might have a tax bill and so she made a voluntary repayment of $2,000 towards her HECS.
However, this amount did not cancel out the required repayments and was simply added as an extra contribution.
'It turns out voluntary repayments don't work like that... It's definitely something people with HECS debt need to be careful of... I still paid over the minimum requirement in voluntary repayments,' she said.
Cassidy from Queensland took to TikTok to reveal she completed her tax return for this year but instead of receiving an expected refund, she was left with the massive bill
She said her advice to others would be to make sure any employers are aware of a HECS debt and double check the student loan repayment box is ticked on any tax forms.
Those with HECS debts should also be aware that any repayments they make are held by the ATO and not paid towards HECS until a tax return is filed, so interest is earned on the full amount until it is reduced yearly.
As of June 1, interest on HECS loans went up by 4.7 per cent following a rise the previous year of 7.1 which is the biggest in three decades.
The loans are indexed each year based on inflation figures.
Changes included in this year's budget will see the lower of either the Consumer Price Index (CPI) or Wage Price Index (WPI) used for indexation, which should reduced the amount of interest accrued on HECS.
