20 TasTAFE workers made redundant just before Christmas have been hit with surprise tax bills after the government skills and training provider got their payouts wrong.
One former worker has been told the mistake could leave them owing up to $4,923.20 more in tax.
In a June 11 letter, TasTAFE admitted it had withheld too little tax from redundancy payments made in December 2025.
The payroll team blamed an “incorrect application of the tax rules”, saying the payouts were wrongly treated as qualifying for an age-based tax-free component.
“There is no requirement to repay this amount to TasTAFE,” the letter said.
But the mistake could still reduce former staff members’ tax refunds or leave them with a bigger bill when they lodge their returns.
“TasTAFE sincerely apologises for this error and any inconvenience,” the letter said.
Labor’s shadow TAFE, skills and training minister Brian Mitchell said the workers were now paying the price for an “incompetent government”.
He said 18 of the affected staff were teachers and two were support workers.
“These are people who have given years, many years, of dedicated service to TasTAFE,” Mitchell said.
“Through no fault of their own, they’re being told they now face a bill to the ATO. Just not good enough.”
Mitchell said one former teacher, who is still out of work, was now facing a bill of about $5,000 and may have to enter a payment plan.
He said the government and union should negotiate a goodwill payment to cover the bills.
The former teacher is seeking advice on whether TasTAFE’s revised figure is correct.
