One of the first things you will need to do when you arrive in Australia is Apply for a Tax File Number (TFN). You will need this to receive an income. TFN’s are used by the Australian Taxation Office to ensure that your income tax is assessed at the appropriate level. When you start working, your employer will provide you with an Employment Declaration form, which assists your employer to calculate the correct amount of tax to deduct from your wages.
To apply for your TFN online visit the Australian Taxation Department website.
Residents - Tax rates 2010-2011
| Taxable Income | Tax on this income |
| $1-$6,000 | Nil |
| $6,001 - $37,000 | 15c for each dollar over $6,000 |
| $37,001 - $80,000 | $4,650 plus 30c for each $1 over $37,000 |
| $80,001 - $180,000 | $17,550 plus 37c for each $1 over $80,000 |
| $180,001 and over | $54,550 plus 45c for each $1 over $180,000 |
Non-residents Tax rates 2010-2011
| Taxable Income | Tax on this income |
| $0 - $37,000 | 29c for each $1 |
| $37,001 - $80,000 | $10,730 plus 30c for each $1 over $37,000 |
| $80,001 - $180,000 | $23,630 plus 37c for each $1 over $80,000 |
| $180,001 and over | $60,630 plus 45c for each $1 over $180,000 |
Medicare Levy
To help fund Medicare, resident taxpayers are subject to a Medicare levy. Most Australians are liable to pay the Medicare levy. The standard Medicare levy is 1.5% of your taxable income.
Individuals and families on incomes above the Medicare levy surcharge thresholds who do not have private patient hospital cover may have to pay the 1% Medicare levy surcharge in addition to the 1.5% Medicare Levy. For further information visit:
http://www.ato.gov.au/individuals/content.asp?doc=/content/17482.htm
Goods and Services Tax (GST)
Australia has a Good and Services Tax which is 10% on most items. GST is included in the price you are asked to pay. Notable exceptions are your home (though homes built after 1 July 2000 will include a GST component, but relief is available to first home buyers), most supermarket groceries, and most medical services.
Stamp Duty
Stamp Duty is payable on certain financial transactions and can really add up. Rates differ from state to state.
You will pay stamp duty on house purchases, new or used vehicles and other transactions such as buying shares, insurance and life insurance.
Australian Taxation Office
The above is a simplistic overview of taxes in Australia, which are generally quite complex. We recommend that professional advice always be sought. You can also visit the Australian Taxation Office website for further information: http://www.ato.gov.au/
Superannuation
Super is a long term savings plan that you undertake throughout the course of your working life to ensure you can live comfortably in retirement. Most Australian employees receive an amount of 9% of their salary, called the ‘superannuation guarantee’ which is contributed to a super fund by their employer. Whilst you are working, your super savings grow because money is paid into your super account regularly, which can be invested through your super fund
The best thing about super is the fact that Australians get loads of tax benefits and government incentives for contributing to super. The tax you pay on money entering your super account and on any earnings is generally capped at 15%. Compare this to the tax you could pay on income earned outside of super, for example, your salary, which could be up to 46.5% (including the Medicare Levy)!
Since 1 July 2005, many employees have been able to choose the super fund or retirement savings account (RSA) that will receive their super contributions.
Click here to go to the ASIC website which provides helpful information and tips on how to pick a superannuation fund that suits you.
