Tax Australia

Paying Tax  - Information for International students, travellers and foreign people wanting to work in Australia.

While working in Australia everyone must pay tax on their income. In nearly all cases if you are travelling in Australia and you have entered the country on a working holiday visa you will be treated as non-resident. What this means is that you will have to pay tax on all of your earnings (Australian residents do not pay tax on the first $6000 they have earned in a financial year). Also your rate of tax will be higher than an Australian resident. (Non-residents are taxed at a rate of 29% on the first $30,000 of their income and a maximum of 45% on earnings over $150,000. Residents pay 15% on what they earn between $6001 and $30,000.)

There are some exceptions to this rule. If you spend most of your time in one particular place, take out a lease on a flat or premises in your name, obtain an Australian driver’s licence; join local clubs etc. and pretty much lead a lifestyle that could be construed as that of a resident more so than that of a traveller, it may be possible for you to be classed by the Australian Taxation Office as a resident. This would mean that you may be eligible to only pay approximately 50% of the tax rate of a non-resident.

When you have to submit a tax return in Australia it would be a good idea to find a good tax accountant to see if and what tax breaks and classifications you may be eligible for.

More information on classifications and tax rates can be found on the ATO’s (Australian Taxation Office) website. Before working or looking for work you will need to obtain a Tax File Number (TFN). If you don’t do this, apart from finding it very difficult to obtain work, you would be taxed at an even higher rate which would leave you earning next to nothing.

To obtain a TFN you will need a working holiday visa and an Australian address. You can apply online at the ATO’s website. Your taxation return will need to be submitted on the 30th June (the end of the financial year) or before you leave the country to return home. As previously mentioned it is wise to enlist a tax accountant to lodge your return and they will charge roughly $AU100 to $AU150.