How bonuses are taxed in Australia
Bonuses are usually taxed through PAYG withholding in the pay run they are paid. The withholding can look high, but your end-of-year tax return reconciles your total annual income and deductions.
Why your bonus can feel over-taxed
Payroll withholding uses formulas that annualise or otherwise estimate income for the period. A one-off large bonus may temporarily push withholding higher than your normal pay cycle.
What matters at tax return time
- Your final tax depends on total taxable income for the full year.
- Withholding and final liability are not always identical in each pay run.
- Any over-withholding is generally reconciled through your return.