Tax in Australia
Every worker in Australia is required to pay tax, regardless of whether you are a citizen or not.
International students that live and work in Australia for more than 6 months are considered Australian residents for tax purposes, which means you’ll need to submit a tax return. If you’re not sure if you need to lodge a tax return, contact the Australian Taxation Office.
To lodge your tax return, you must first apply for a tax file number (TFN). You can apply for a tax file number as soon as you arrive in Australia.
If you do not register for a tax file number, you will be taxed at the high rate of 47%, so be sure to register as soon as you arrive. It is possible that you will be able to claim a lot of this tax back by completing a tax return.
The financial year in Australia runs from the 1st of July until the 30th of June. However, if you are leaving Australia before the end of the financial year, you can complete a tax return for the year in advance and lodge it with the Australian Tax Office (ATO).
Applying for an TFN
A tax file number is a personal reference number that you need to provide your employer with when you start a new job so you can pay your taxes. It is similar to a social security card in the United States, or a National Insurance Number in the UK. Applying for a tax file number is easy and can be completed online.
It is important that you apply for your TFN as soon as you arrive in Australia, as it can take up to 28 days to get processed. It is free to apply for a TFN. Once submitted the application, the TFN number will be posted to your address. To apply for one:
You must already be in Australia
You must have a valid passport
You must have a valid visa
Applying for an Australian Business Number (ABN)
An ABN is an Australian Business Number. You would obtain an ABN if applying for a subcontractor/independent contractor job or if you would like to start your own business. International students can open their own businesses in Australia. To apply for an ABN, you must first have a TFN.
In many industries, including construction, this is very common. Having an ABN can increase your employment opportunities as well as provide you with the legal status you need to start or operate and run a business in Australia.
Applying for an ABN is free and you will receive it almost immediately. To find out more about the benefits of having an ABN, click here or watch our YouTube video. For a step-by-step guide on how to apply for an ABN, click here.
How to submit your tax return
Every international student that is living and working in Australia for more than 6 months is considered an Australian resident for tax purposes, which means you’ll need to submit a tax return.
You can either lodge it yourself online through myGov or use a tax agent.
If you decide to lodge it yourself, you will need to create an account with myGov (if you don’t have one) and link it to the ATO (Australian Taxation Office).
When you lodge your tax return, be sure to apply for all the deductions for which you are eligible. These include everything from clothing, computers, books, phones, footwear etc.
To lodge your tax return, you will need:
- Your tax file number (TFN)
- A photo ID
- Bank account details
- Your PAYG Payment Summaries/Payslips
- Your invoices if you worked under an ABN
Pathway to Aus is partnered with Taxback.com to help you claim your Australian tax refund!
Pathway to Aus’ students receive a free tax refund estimation. And if you are not due a refund, you don’t have to pay Taxback.com a penny! Register here.
Superannuation
Superannuation in Australia is money paid by employers for “retirement pension contributions”. Employers must pay superannuation for all employees, and the amount is approximately 10% of the weekly wage. Non-residents can receive 70% of this superannuation back when they leave Australia, and the amount claimed can be a sizeable amount.
How Super works
Superannuation or ‘super’ is a form of saving for retirement in Australia. If you are working under a TFN, your employer must pay a minimum of 10.5% of your earnings into your super. You can also choose to make additional payments to your super fund.
If you are new to Australia and don’t have a Super account yet, you can either choose to open an account from your preferred provider or wait until you start working, and your employer will choose a default super account on your behalf. When you start a new job, you can either provide your own super details to your employer if you decided to open a super account previously or otherwise, they will choose a default super account on your behalf.
Please note that if you change jobs (or have more than one job) and don’t provide your super details to your new employers, you will end up with a few different super funds in your name. This is not ideal, as most super funds charge insurance and/or maintenance costs. Try to keep it all in one account.
The money paid into your super account is invested by the fund in many things, such as shares, property and managed funds. You cannot withdraw or access this money while you are in Australia.
When you leave Australia, you may be eligible to claim that super back. There are requirements you will need to meet to claim it.
Choosing a super fund
You can find out about and compare super funds by using:
ATO’s YourSuper comparison tool
the ATO’s YourSuper comparison tool, an online list provided by the Australian Government comparing MySuper products
PDS
Super fund
Comparison websites
Non-government comparison websites can also be useful, but may not cover all your options. See what to keep in mind when using comparison websites.
Non-government super comparison websites include:
How to apply for a refund of superannuation contributions
If you have worked and earned super while visiting Australia on a temporary visa, you can apply to have this super paid to you after you leave. When you leave Australia, you may be eligible to claim that super back as a departing Australia superannuation payment (DASP). There are requirements you will need to meet to claim your DASP:
- your visa has ceased to be in effect (for example, it has expired or been cancelled)
- you have left Australia and you do not hold any other active Australian visa
- you are not an Australian or New Zealand citizen, or a permanent resident of Australia.
We would recommend that you submit your superannuation back through Tax Back.
If you’re eligible for a DASP, you can submit an application via the DASP online application system. You can only submit a DASP application when you have left Australia and do not hold an active visa. However, it is recommended you start your DASP application while you are still in Australia and have all the relevant information handy.
Your DASP will generally be paid within 28 days of receipt of your completed application. It may take longer if you submit an incomplete application or you are required to submit additional supporting documents.
Your DASP will be taxed when you claim it.
