Glossary

A

APRA

Australian Prudential Regulation Authority - regulates banks, insurers and most super funds for safety and soundness.

ASIC

Australian Securities and Investments Commission - the corporate, markets and financial-services regulator. Runs the free Moneysmart site.

ATO

Australian Taxation Office - the government body that collects tax and administers super and HELP debts.

Assets

Things you own that have value - savings, super, investments, a home, a car.

B

Bracket (tax)

A band of income taxed at a set rate. Australia is progressive: only income inside a band is taxed at that band\u2019s rate.

Brokerage

The fee an online broker charges to buy or sell shares.

Buy now, pay later (BNPL)

Splitting a purchase into instalments. Usually no interest, but late fees apply and it is easy to overcommit.

C

CPI

Consumer Price Index - a measure of inflation. HELP debt is indexed to the lower of CPI or wage growth each year.

Capital gain

The profit when you sell an asset for more than you paid. Generally taxable, with a 50% discount if held over 12 months.

Compound interest

Earning interest on your interest as well as your original money. The engine behind long-term saving and investing.

Concessional contribution

A before-tax super contribution (employer SG, salary sacrifice, or a claimed personal deduction). Capped at $32,500 in 2026-27.

Conveyancing

The legal process of transferring property ownership when you buy or sell.

D

Deduction

An expense that reduces your taxable income (so you pay tax on a smaller amount).

Deposit (home)

The upfront share of a property\u2019s price you pay yourself. 20% avoids LMI; schemes can let you buy with less.

Diversification

Spreading money across many investments so one bad result does not sink you.

Dividend

A share of a company\u2019s profit paid to shareholders. Australian dividends often carry franking credits.

E

ETF

Exchange Traded Fund - a single fund holding many shares that tracks a market, bought like a share. Cheap, diversified.

Effective (average) tax rate

The share of your total income paid in tax - always lower than your top marginal rate.

Emergency fund

Money set aside only for genuine surprises - the single most effective way to reduce money stress.

F

FHSS

First Home Super Saver - saving a home deposit inside super, where it is taxed lightly, then withdrawing it for a first home.

Franking credit

A credit attached to Australian dividends for company tax already paid, which can reduce your own tax.

G

Gross pay

Your pay before tax and other deductions.

H

HELP / HECS

Higher Education Loan Program - the government student loan. No interest, but indexed yearly; repaid through the tax system.

Hardship arrangement

A temporary change to repayments that a lender must consider if you are struggling. Ask for one early.

Home Guarantee Scheme

A federal scheme letting eligible first buyers purchase with as little as a 5% deposit without paying LMI.

I

Index fund

A fund that simply tracks a whole market index rather than trying to beat it. Low-fee and popular with beginners.

Interest rate

The cost of borrowing, or the return on savings, as a yearly percentage.

L

LITO

Low Income Tax Offset - up to $700 that automatically reduces tax for lower-income earners.

Lenders Mortgage Insurance (LMI)

Insurance protecting the lender (not you) if your deposit is under 20%. A cost you avoid with 20% down or a guarantee.

Liabilities / debts

Money you owe - loans, credit cards, BNPL, a mortgage.

M

Marginal tax rate

The rate applied to your next dollar of income - the top bracket your income reaches.

Medicare levy

A 2% levy on taxable income (for most residents) that helps fund public health. Reduced or nil for low incomes.

N

Net pay

Your take-home pay - what lands in your account after tax and deductions.

Net worth

Everything you own minus everything you owe.

Non-concessional contribution

An after-tax super contribution. Capped at $130,000/yr in 2026-27; no further contributions tax.

O

Offset account

A savings account linked to a home loan; its balance reduces the interest you are charged.

P

PAYG withholding

Pay As You Go - the income tax your employer withholds from each pay and sends to the ATO on your behalf.

Preservation age

The age you can generally first access super. Depends on your birth year; it is 60 for anyone born after June 1964.

S

Salary sacrifice

Arranging for part of your pre-tax pay to go into super (taxed at 15%) instead of your bank account.

Stamp duty / transfer duty

A state tax on property transfers - often a large upfront cost, sometimes reduced or waived for first buyers.

Super guarantee (SG)

The compulsory super your employer must pay - 12% of ordinary earnings for 2026-27.

Superannuation (super)

Money set aside for retirement. Your employer pays 12% of your wage into it in 2026-27.

T

Tax file number (TFN)

Your personal reference with the ATO. Keep it private; give it only to employers, banks, super funds, the ATO and Centrelink.

Tax offset

An amount subtracted directly from the tax you owe (unlike a deduction, which lowers taxable income).

Taxable income

Your income after allowable deductions - the figure your tax is calculated on.

Can\u2019t find a term? Tell us and we will add it. Verified 20 July 2026