Starting your first apprenticeship usually means your first real job — and your first run-in with tax. It sounds intimidating, but the basics are genuinely simple once someone explains them plainly. Get a couple of things right at the start (mainly your Tax File Number and your tax declaration) and most of the tax side just takes care of itself in the background.
This guide covers what you actually need to know as a first-year apprentice: how income tax works, the paperwork to sort on day one, what shows up on your payslip, and how to handle your first tax return. It's general information, not personal tax advice — for anything complicated, talk to a registered tax agent or check the ATO at ato.gov.au.
How income tax works in plain English
In Australia, you pay income tax on the money you earn. But you don't get a big bill at the end of the year — instead, your employer takes a bit of tax out of each pay and sends it to the ATO for you as you go. This is called PAYG (pay as you go) withholding.
At the end of the financial year (30 June), you do a tax return to check whether the right amount was taken out. If too much was withheld, you get a refund. If too little, you might owe a bit. For most apprentices on modest wages, the amount withheld is usually about right or slightly over, so a small refund is common.
Australia uses a tax-free threshold, meaning you pay no tax on the first chunk of income you earn each year. Above that, tax is charged at increasing rates. On apprentice wages, you're likely in the lower brackets.
Get your Tax File Number sorted first
Your Tax File Number (TFN) is your personal reference number with the ATO. You need it before you start work — or very soon after. Without one, your employer has to tax you at the highest rate, which means way less in your pocket.
You can apply for a TFN for free through the ATO at ato.gov.au. Never pay a third party to get one for you, and never share your TFN casually — it's a key piece of personal ID that scammers love. Only give it to your employer, your super fund, your bank, and the ATO.
The tax file number declaration
When you start, your employer will ask you to complete a Tax File Number declaration (often done online now). This tells them how to tax you correctly. The big question on it is whether you want to claim the tax-free threshold.
Here's the simple rule: if this is your only job, claim the tax-free threshold. That way you get the tax-free amount spread across your pays and take home more each week. If you somehow have two jobs at once, you generally only claim it on the higher-paying one, so you don't get under-taxed and land a bill later.
Fill this in carefully. Getting it wrong is the most common reason apprentices are taxed too much or too little.
What tax looks like on your payslip
Once you're set up, tax mostly happens automatically. On your payslip you'll see:
- Gross pay — what you earned before tax.
- PAYG tax (or "tax withheld") — the amount sent to the ATO.
- Net pay — what actually lands in your bank.
The gap between gross and net is mainly that tax. It can be a shock the first time, but it's normal. If you want to understand every line on your payslip, read How to Read Your Payslip. And note: super is separate — it's paid on top of your wage, not taken out — as covered in Superannuation for Apprentices.
Your first tax return
After 30 June, you lodge a tax return covering the financial year just gone. The easiest way is through myTax in your myGov account, which links to the ATO. A lot of your information — income, tax withheld, super — is pre-filled automatically once your employer reports it, so you're mostly just checking and confirming.
You've got until the end of October to lodge yourself, or longer if you use a registered tax agent. Don't skip it — even if you earned under the tax-free threshold, lodging (or telling the ATO you don't need to) keeps you square.
Deductions: what tradies can claim
A tax deduction lowers the income you're taxed on, which can boost your refund. Apprentices often have work-related expenses that may be deductible, such as:
- Tools and equipment you buy for work.
- Protective clothing and gear — steel-caps, hi-vis, sun protection for outdoor work.
- Some training and course costs directly related to your current job.
- Work-related travel in certain situations (not your normal home-to-work commute).
- Union fees.
The golden rules: you must have actually spent the money yourself and not been reimbursed, it must relate to earning your income, and you need a record (keep your receipts — a photo in a folder on your phone is fine). Note that tools covered by an allowance or paid for by your employer aren't deductible the same way — see Tool Allowances: What You're Entitled To. The ATO has a free myDeductions tool in its app to track expenses through the year.
Keep good records and avoid the traps
A few habits make tax time painless. Keep every work-related receipt. Keep your payslips and your end-of-year income statement. Don't rely on getting a big refund — treat any refund as a bonus, not a plan.
Watch out for scams: the ATO will never text or email you demanding immediate payment in gift cards or threatening arrest. When in doubt, log in directly through myGov rather than clicking links. If your tax situation gets complicated, a registered tax agent is worth the fee, and their cost is usually deductible too.
If you're also juggling government payments or loans, get across Government Payments and Support for Apprentices, since some of those interact with your tax.
Key takeaways
- Tax is taken from each pay automatically (PAYG); you settle up with a tax return after 30 June.
- Apply for a free Tax File Number through the ATO before you start work and guard it carefully.
- Complete your Tax File Number declaration correctly — claim the tax-free threshold on your only (or main) job.
- The gap between gross and net pay is mostly tax; super is separate and paid on top.
- Lodge your return each year via myTax in myGov — much of it is pre-filled.
- You may claim deductions for tools, protective gear, some training and union fees — keep receipts and only claim what you paid for yourself.
- Watch for tax scams, and use a registered tax agent if things get complicated.