Tax & Superannuation - Australia
Tax in Australia is paid on a sliding scale. If you are planning to work in Australia you will need to obtain a Tax File Number. Although it is not compulsory, it is to your advantage to avoid paying more tax than necessary. You can apply for your Tax File Number at any main taxation office.
It will take approximately four weeks to process and you will be issued with a registration notice which allows you to work in the meantime. To find out more about the Australian taxation system contact www.ato.gov.au
Filing a Tax Return
Australian taxation law requires all salary earners to submit an annual Tax Return showing all income earned and tax paid in the tax year. The Australian tax year starts on the 1st of July and ends on the 30th of June the following year.
Before you leave Australia, you should obtain Payment Summaries from all of your employers. You will need these to complete your final Tax Return. Tax Return forms may be obtained from post offices or downloaded from the Australian Tax Office’s website at www.ato.gov.au. The keywords to search for on the website are ‘PAYG’ (Pay As You Go) and ‘TaxPack’. We recommend that you seek the services of a good personal tax accountant. Fees incurred for an accountant to organise your tax claim are tax deductible the following year.
If you are selling property before you leave your current country you may incur a Capital Gains tax that can be offset against your Australian income. Additionally some immigrants will be entitled to a living away from home allowance. Seeking professional tax advice is recommended. For further information on your Tax Return requirements please visit www.ato.gov.au
Superannuation is best explained as a compulsory pension contribution. Superannuation contributions are compulsory, even for temporary residents and working holiday makers and are only redeemable upon retirement. The current contribution is 9% of your salary and your employer will automatically pay this on your behalf to a Superannuation Fund, but only after you have earned a minimum of $450 in a calendar month. Earnings under this amount do not qualify for superannuation.
In most circumstances hourly rates will be quoted excluding superannuation. For example, you may hear the phrase ‘the rate is $x per hour, plus super’. In this case the pay rate you receive would be ‘$x’ and your employer will pay superannuation in addition to your pay rate. Be sure to check this carefully with your recruitment consultant.