Australian Tax
Who collects the tax and why?
The Australian Tax Office (ATO) collects all income tax and other Commonwealth taxes. Taxes that are paid to the Australian Government are used to provide services to the community such as health, education, defense, road and railways, social security and welfare.
What is a Tax File Number?
An Australian tax file number (TFN) is the equivalent of the UK’s National Insurance Number. The TFN is a unique number issued by the Tax Office to individuals for identification, record keeping purposes and to track tax payments.
Who needs a Tax File Number?
Generally, if you intend to earn money in Australia you will require a TFN, this includes migrants and those who are visiting Australia as a temporary visitor with the appropriate work rights. Without a TFN employers must withhold 48.5% from payments they make to you. This may be much more than needs to be withheld.
How much tax will I be paying?
Employers are required to withhold tax from the payments they make to you and send those payments to the Tax Office regularly. Anyone visiting Australia on a 417 or 457 visa are considered to be non-residents and are subject to the non-resident tax rates:
Non-resident Tax rates 2007-08
Taxable income = $0 – $30,000
Tax on this income = 29c for each $1
Taxable income = $30,001 – $75,000
Tax on this income = $8,700 plus 30c for each $1 over $30,000
Taxable income = $75,001 – $150,000
Tax on this income = $22,200 plus 40c for each $1 over $75,000
Taxable income = $150,001 and over
Tax on this income = $52,200 plus 45c for each $1 over $150,000
Not sure how to calculate how much tax you’ll be paying? Visit the ATO’s Simple Tax Calculator here.
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