I am thinking about working in Australia…
What sort of taxes do I need to know about?
If you are thinking about working in Australia, you will have to pay tax if you earn an income. The tax rates that apply to your taxable income depend on whether or not you are an Australian resident. A higher rate of tax is applied to your taxable income if you are non-resident. A non-resident is not entitled to a tax-free threshold and is not required to pay the Medicare levy.
What do I need when I start working?
Before you start working in Australia, you will need a tax file number (TFN). A TFN can be obtained online at the Tax Office website www.ato.gov.au/individuals You will also need a valid passport or relevant travel documents to apply for a TFN and you must also be in Australia.
If your application is successful, the system will give you a receipt number. The tax file number advice will then be sent within 28 days to the Australian address you provided on your application. You will also need your TFN for dealings with other government agencies and investment bodies, for example, when you open a bank account.
Working temporarily in Australia?
If you plan to live and work in Australia on a temporary basis and will be working under contract in the construction industry, or involved in sporting and entertainment events, or casino gaming tours, your payments may have amounts withheld in line with the foreign residents withholding measure. Under this measure your payer or agent (if you receive payments through an agent) will withhold a prescribed percentage from your payments. Under certain circumstances you can apply to vary the percentage.
How do I pay tax?
When you work for someone, your employer automatically takes tax out of your salary or wages. At the end of the financial year (every 30 June), your employer will issue you with a document called a ‘payment summary’. This shows how much you earned, how much tax was deducted from your pay and the period of your employment.
You use your payment summary to lodge a tax return with the Tax Office. You must do this by 31 October every year. If you are considered a resident of Australia for income tax purposes then your tax return must show all sources of income, including any overseas or investment income. You may be able to reduce the amount of tax you pay through claiming some deductions and tax offsets. Other taxes and levies you may need to pay include:
Medicare levy
Medicare is the scheme which gives Australian residents (only)access to health care. To help fund the scheme, resident taxpayers are subject to a Medicare levy. Normally the levy is calculated at 1.5% of your taxable income. A variation to this calculation may occur in certain circumstances.
Goods and services tax (GST)
A 10% GST is generally levied on the supply of goods or services. State taxes, Stamp duty, land tax and payroll tax are examples of taxes which may be levied by
State Governments.
What happens to my superannuation if I leave Australia permanently?
Eligible temporary residents who have departed from Australia permanently can access superannuation benefits they may have accumulated during their stay.
From 1 July 2002, people who have entered Australia on an eligible temporary residents’ visa that has been cancelled or has expired and who depart permanently are able to apply to their superannuation fund for payment of their benefit.
This is called the departing Australia superannuation payment (DASP).
Eligibility requirements that apply mean that Australian and New Zealand citizens cannot access their superannuation through this measure.
Where can I get more information?
The Tax Office provides you with all the information you need to complete your tax return in a free publication called TaxPack. You can also lodge your tax return electronically, using e-tax, available free on the Tax Office web site. Free information and publications can also be accessed on the Tax Office web site – www.ato.gov.au/individuals Help is also available from independent tax accountants and advisers in the community.
When you arrive in Australia, you can call the Tax Office on 13 28 66 for any enquiries you have about personal tax. If you don’t speak English well and want to talk to a tax officer, call the Translating and Interpreting Service on 13 14 50 for help with your call.
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