It’s important to declare bank interest on your tax return to avoid ATO tax “surprises”.
On your tax return, Gross Interest is income paid to you from a financial institution (like a bank or building society). If you have a savings account, you probably earned some bank interest.
Your bank reports the interest you received – directly to the ATO!
The ATO compares the information with your tax return. Therefore, you need to enter ALL your bank interest into your annual tax return. If the ATO find a discrepancy, they will adjust your tax refund and you could receive a penalty or have to pay your refund back to the ATO. So, it’s important to get this right.
How can I find out how much bank interest I received each year?
Your bank – or financial institution – will give you a statement that shows the bank interest you have earned each year, usually supplied through your internet banking account.
If you haven’t received a statement, contact your bank directly.
Or, with most banks, you can find that in a few clicks on your internet banking – or phone the bank and ask for the total interest from the past financial year.
How do I complete the bank interest section on my tax return?
To declare your bank interest in your Etax return,
- Click the Gross Interest tile in the Income section of your Etax Tax Return. The section will appear down below.
- Add up ALL of the interest you received in the year from ALL of your bank accounts.
- Enter the total into the Total Interest Received field. Done!
- If you have joint accounts with a partner or family member, only claim your share of the bank interest you received. For example: An account you hold with your spouse earns $200 interest in the financial year. You would claim 50% = $100 on your return and your spouse would enter the other $100 on their return.
- Did you open or handle a bank account for a child with your own funds? Did you personally spend or receive any money from that account? If so, you must also include interest from that account in your return.
- Do not deduct account keeping fees or charges from the gross interest amount.
No Tax File Number (TFN) Supplied
If you did not provide the bank with your tax file number, they will have deducted tax from your interest payments. Your annual bank statement shows this if you never gave a TFN to your bank. You should claim that tax back by entering the total withheld in the “Total tax withheld from interest” field.
Partnerships, Trusts and Foreign Income Sources
The Gross Interest section of your tax return is only for interest received from banks and financial institutions. Enter interest received from Partnerships, Trusts or Foreign Sources in the Foreign Source Income and Partnership and Trusts sections of your Etax return.
If you’re a foreign resident and tax is deducted from your overseas bank interest, do not include the bank interest on your tax return.
As a foreign resident with no tax deducted from your interest, a form with additional information including your details and total interest earned is required (best to let tax agents like Etax handle that for you, so you avoid ATO troubles). Later, the ATO will advise you of any withholding tax you might have to pay on this interest (usually around 30%).
Need a little more help?
Not sure how to claim (or find) the interest you received? Please get in touch with us, we’re always happy to help.
Log in and send us a message using My Messages at the top of your return, or just attach the relevant interest statements to the Any Other Questions section at the end of your tax return: We’ll take it from there and get the return done for you.