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Picture Book · Tax in depth

The first $18,200

Story pages

A young man aged nineteen with curly hair wiping down tables at a small outdoor cafe under a jacaranda
Meet Josh. He's 19, studies and works part time at a cafe, earning about $20,000.
A wide open gate onto a sunny paddock
Australian residents can earn $18,200 a year before any income tax applies.
A single small coin-sized pebble resting on a large flat rock in the sun
On his income, Josh's tax before offsets is $270: 15% of the $1,800 over the threshold.
An umbrella opening over a small potted seedling as light rain begins
The low income tax offset of up to $700 applies to taxable incomes of $37,500 or less, and shrinks to nil at $66,668.
A watering can pouring onto a seedling that is slowly growing taller
An offset reduces the tax you owe, not your income, and it can only take your tax down to zero. Josh's offset covers his $270.
A young man aged nineteen with curly hair smiling at a laptop on a sunny balcony
Josh lodges a tax return so any tax taken from his pay can come back to him.

The end

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General advice warning. This picture book is general information only. It does not take into account your objectives, financial situation or needs, and it is not personal advice. Rules and thresholds change. Before acting, consider whether it is right for you, read any relevant Product Disclosure Statement and our Financial Services Guide, and seek personal advice. Past performance is not a reliable indicator of future performance.

Information as at 27 October 2026. Sources:

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