How the debit tax works

The rule that is applied when calculating the Debit Tax is incredibly simple. It is as follows:

  • If your bank account is credited (i.e. a payment is received) - no tax is calculated.
  • If your bank account is debited (i.e. a payment is made) - a tax of 1% is calculated.



Payment mechanism

The way that the Debit Tax is paid to the ATO - is very similar to the way that GST payments are made to the ATO. The only difference is that with the Debit Tax, your bank (instead of the merchant that sold you the goods) will make the payment to the ATO.

Below is an example that should clarify the situation: