All Australian citizens and temporary or permanent residents earning income in Australia are subject to income tax. and work in the same job and live at the same address for most of that time, you will generally be considered an Australian resident for tax purposes. If you are visiting Australia for more than six months,
Your employer is responsible for calculating and deducting tax withholding from each of your income payments based on your salary and information you will provide in Tax File Number and Withholding Declarations.
Tax Rates 2010-2011
|Taxable income||Tax on this income|
|$0 – $35,000||29c for each $1|
|$35,001 – $80,000||$10,150 plus 30c for each $1 over $35,000|
|$80,001 – $180,000||$23,650 plus 38c for each $1 over $80,000|
|$180,001 and over||$61,650 plus 45c for each $1 over $180,000|
Your employer is required by law to withhold tax from your salary, as you earn it, and forward this to the Australian Taxation Office. This system is referred to as the Pay As You Go (PAYG) scheme. At the end of the financial year* in June, you will be required to lodge your income tax return. If your pay and circumstances have been consistent throughout the year, you may be entitled to a small refund when you complete your tax return.
*The financial year runs from July 1 – June 30.
Obtaining a Tax File Number
Before you begin work in Australia, it is important to obtain a Tax File Number (TFN) from the Australian Taxation Office. Your employer may provide you with information on how to obtain a TFN before you enter the country, but if you find you have arrived without one, you can apply online (if your visa allows you to work, study, or stay indefinitely in Australia). Application is free and your Tax File Number will be posted to you once it’s granted (usually within 2 weeks). You only need to apply once, even if your circumstances change in the future.
Australian Taxation Office Individuals TFN website:
Tax File Number Declaration
Your company will ask you to complete a Tax File Number Declaration. This form asks you to quote your Tax File Number as well as provide other information that assists your company to calculate the amount of tax to withhold from your pay and send to the Tax Office. If you do not provide a Tax File Number, the company will be required to withhold tax at the top marginal rate, including Medicare (currently 46.5%).
Lodging Your Taxes
If your tax affairs are simple, you are welcome to file your own tax return. If this is your first year filing taxes in Australia as an expat, it is highly recommended you use an advisor or accountant. For more information on locating an advisor or accountant, see the Tax Advisors / Accountants Section.
To lodge your return yourself, you can use a Tax Pack (available free from Newsagents, or the Australian Taxation Office) that guides you through the questions, requirements and documentation. Returns and refunds are usually available within 6 weeks if lodged using a Tax Pack.
Alternatively, the Australian Taxation Office offers electronic filing through their E-Tax program. Similar to the Tax Pack, this program uses a serious of questions and forms to determine your earnings, and if any refund is owed to you. Filing electronically generally leads to quicker refunds (within 14 days) than filing with a Tax Pack.
For more information on lodging a Tax Assessment, see the Australian Taxation Office website at http://ato.gov.au
For information on, and to download, the E-Tax program, see http://www.ato.gov.au/individuals/content.asp?doc=/content/39979.htm
Australia has tax treaties with many countries that may allow you to avoid double taxation as an expat. These treaties (and their potential benefits to you) vary greatly by country. Countries with which such arrangements currently exist include:
- Czech Republic
- East Timor
- Korea (Republic of)
- New Zealand
- Papua New Guinea
- South Africa
- Sri Lanka
- United Kingdom
- United States of America
For current, detailed information concerning the agreement with your country, and how it will effect your taxation both in Australia and in your home home country, see the Australian Treasury Department’s Tax treaties web page at http://www.treasury.gov.au/content/tax_treaties.asp?contentid=759&title=tax%20treaties