Income tax
Notice of assessment
A notice of assessment is the document the ATO issues after processing your tax return, showing your taxable income, tax payable and whether you receive a refund or owe a debt.
Once the ATO has processed your income tax return, it issues a notice of assessment. This document sets out the ATO's calculation of your tax for the year. It shows your taxable income, the tax on that income, any offsets and credits applied, the Medicare levy where relevant, and the final amount you will be refunded or must pay.
For individuals who lodge online, the notice is generally available in ATO online services through myGov within a short time, and refunds are often paid soon after. Businesses and tax agents receive notices through their own channels. The notice is an important record, so download or save a copy and keep it with your tax records.
If you have a tax debt, the notice states the date by which payment is due. Unpaid amounts after the due date can attract the general interest charge, which is calculated daily. If you cannot pay in full, you can contact the ATO to discuss a payment plan, and doing so before the due date is generally better than waiting until after it.
The notice is also the starting point for review rights. If you think the assessment is wrong, you may be able to object, or you may be able to request an amendment of your return. The time limits for these actions are set by law and can be quite strict, so it is a good idea to check the notice carefully when you receive it and act promptly if something looks wrong.
The notice is relevant to people in business in other ways. Lenders, landlords and government agencies often ask for notices of assessment as evidence of income. Because it summarises your taxable income and tax paid, it can support a loan application. Your adjusted details such as the amounts carried forward, for example tax losses, may also appear or be recorded in the ATO's systems.
A notice of assessment is based on the information you provided, and it is not a guarantee that the ATO accepts your return. The ATO can still review or audit a return within the allowed time. Keep your supporting records, including invoices and BAS information, for five years from lodgment. This is general information only, so confirm any questions about your notice with the ATO or a registered tax professional.
Worked example
After lodging, Ahmed receives a notice showing taxable income of $82,000, tax on that income and Medicare levy totalling $19,500, and PAYG credits of $21,900. Credits exceed the tax by $21,900 - $19,500 = $2,400, so he is due a refund of $2,400. If the figures were reversed, the notice would show an amount owing and a due date for payment.
Practical tips
- Save a copy of every notice of assessment, since lenders and agencies often ask for them as proof of income.
- Check the figures carefully and act quickly if you think they are wrong, as time limits apply to objections and amendments.
- If you cannot pay a debt by the due date, contact the ATO early about a payment plan to limit interest.