Tax offsets are amounts subtracted directly from your tax payable. Tax offsets may also be referred to as tax rebates.
In contrast, a tax deduction is an amount subtracted from taxable income, which therefore only reduces your tax by your marginal tax rate percentage.
Each type of tax offset can potentially result in no tax being payable. Some tax offsets may be refunded in cash (for example franking credits) if the offset value is higher than tax payable. (“refundable offsets“).
Most tax offsets however, are not refundable.
This page was last modified 2020-03-27