Get tax taken from your student payment to be ahead at tax time

13 April 2021

One easy way to avoid a possible tax debt, everyone who gets a student payment should know.

Some payments you get from us are taxable, like Youth Allowance, Austudy and ABSTUDY Living Allowance. This means they count as part of your taxable income at the end of each financial year.

As well as a student payment, you may have got some extra payments and supplements from us due to coronavirus. Some of these may also have been taxable, like the temporary Coronavirus Supplement. Also, you may have earnt income from working.

At the end of the financial year, extra income on top of your student payment may either:

  • put you over the tax-free threshold
  • mean you must pay the Medicare levy.

This means you may have to pay the Australian Taxation Office a large tax lump sum at tax time.

To avoid this, you can ask us to take out regular amounts of tax from your payment. We call this a tax deduction. When you set up a deduction, you’ll pay tax in smaller amounts throughout the year.

Next steps

You can set up, change or cancel the amount of tax you want taken from your payment at any time. Use our online guide to help you manage tax deductions with your Centrelink online account

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Page last updated: 13 April 2021