All Australians and visitors earning income are subject to income tax. You will either be taxed as a resident or non-resident. If you are visiting Australia for more than six months and for most of that time work in one job and live in the same place, you will generally be considered an Australian resident for tax purposes. You should apply for a Tax File Number (TFN) online on the Australian Tax Office website or at a Australian Tax Office shopfront as soon as you arrive to Australia.Australian Tax Office http://www.ato.gov.au
Your employer will work out how much tax to withhold based on information you provide in your Tax File Number Declaration and Withholding Declaration. The Tax File Number Declaration form, which is supplied by your employer, asks you to quote your TFN as well as provide other information which assists your payer to calculate the amount of tax to withhold from your pay and send to the Tax Office. This formality is part of your induction into a business and is a required document by law.
If you do not provide a TFN your payer will be required to withhold tax at the top marginal rate, including Medicare. You will need to check with your country of origin if you will be subject to double taxation.
Your employer is required by law to withhold tax from your salary, as you earn it, and forward this to the Tax Office. This system is called Pay As You Go (PAYG) withholding. At the end of the financial year, in June, you will be required to lodge your income tax return. Any tax deductions you may have will reduce the tax you are required to pay. This means you may be entitled to a small refund when you complete your tax return. If you are doing your income tax return yourself it will be due by 31 October of the same year. If you use a tax agent they have their own deadlines. Processing of tax returns takes 2-6 weeks.
If you are a resident for tax purposes (Tax rates 2013-2014):
- $1 – $18,200 Nil
- $18,201 – $37,000 19c for each $1 over $18,200
- $37,001 – $80,000 $3,572 plus 32.5c for each $1 over $37,000
- $80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
- $180,001 and over $54,547 plus 45c for each $1 over $180,000
Non-resident tax rates (Tax rates 2013-2014):
- $0 – $80,000 32.5c for each $1
- $80,001 – $180,000 $26,000 plus 37c for each $1 over $80,000
- $180,001 and over $63,000 plus 45c for each $1 over $180,000