23yo healthcare worker stunned by huge tax bill

A young Aussie has taken to social media to share an “unexpected” tax bill that left her in disbelief.

A 23-year-old Aussie has gone viral after discovering she will likely owe the Australian Taxation Office (ATO) $17,000 – revealing why some employees who only work one job can still end up owing money.

Alice, from Perth, took to TikTok to share how much the tax office has estimated she’ll owe once she files her return.

“I am just a 23-year-old teenage girl. Please don’t do this to me,” she wrote on social media and the clip amassed over 170,000 views.

“Darn you HECS debt,” she said.

It got an immediate response from fellow Aussies, and most were fairly freaked out by the huge amount.

“Crying for you,” one empathised.

“I thought mine was bad and I had to pay $8k,” another wrote.

“How does this happen?” Another asked.

Young Aussie shares her huge bill. Picture: Istock

Alice told news.com.au she ended up owing that amount of tax not from working multiple jobs or running her own business but because she’s a healthcare worker who opted for a salary package.

“I ended up owing tax as I salary package, so a large portion is a fringe benefit that gets taxed heavily,” she said.

Salary packaging is an option for healthcare workers. Basically, you can agree with your employer where they pay you a lower salary but then pay you a benefit of similar value.

Alice thought she might end up owing some tax, but she didn’t imagine it would be $17,000.

“I was not expecting it to be that large but I can manage it and save up until I have to pay it off in November,” she said.

Alice earns $90,000 a year, working full-time. She said that as an individual, she gets “taxed a lot” and isn’t able to “claim as much as businesses” can.

“I was caught off guard on how much it would be as I thought it would be max $10,000 debt. I learnt my lesson last year but this is more than expected,” she said.

The young worker also doesn’t understand how she’s ended up owing the tax department so much money.

“People say not to salary package if you have HECS, but I think I still would because at least I’m paying off my HECS quicker,” she admitted.

Financial expert Graham Cooke said Ms Chen’s bill is due to the way salary packaging works.

“As salary packaging benefits are considered fringe benefits, over-availing of salary packaging can push you into a higher repayment threshold, and higher HECS deduction,” Mr Cooke said.

“While salary packaging often offers financial benefits, it’s crucial to understand the potential tax implications, especially in relation to HECS.”

Mr Cooke stressed seeking financial advice is crucial if you do end up with an unexpected tax bill.

“If you find yourself in this situation, consult a tax professional. A tax accountant can review your financial situation, calculate the correct fringe benefits tax (FBT), and identify any errors or overpayments,” he advised.

“You can also look at your agreement – examine the details of the salary packaging agreement to help determine if the benefits were correctly valued and taxed.”