Tax
Taxation
Most people who work for an employer in Australia are paid a wage or salary directly into a bank account on a weekly, fortnightly or monthly basis.
Income tax is paid on all salary and wages in Australia, as well as on any other forms of income.
Employers usually deduct income tax from employee wages and send the tax payment to the Australian Taxation Office.
Other income such as income from investments and interest on bank accounts must be declared on a tax return which must be lodged by 31 October for the previous fiscal year (1 July to 30 June).
Tax return forms are delivered to all households at the end of June each year. They are also available for free from newsagents.
Employers should provide staff with a Payment Summary at the end of the financial year which shows earnings during the year. This must be included with when completing a tax return.
Applying for a Tax File Number
People migrating to Australia should apply for a Tax File Number (TFN) as soon as possible after arrival in Australia.
A TFN is a unique number issued by the Australian Taxation Office (ATO) to individuals and organisations for identification and record keeping purposes.
Every Australian resident with earnings from employment or investment needs a TFN.
Applications for a TFN can be made by phoning the Tax Office or a Centrelink office and getting a TFN application form sent to you. Alternatively you can apply for a TFN online by following this link for online TFN applications.
Tax File Number Declaration: When starting work with a new employer, employees must complete a Tax File Number (TFN) declaration form which will be used to determine how much tax they pay.
The declaration will ask an employee for their TFN. If this number is not provided, tax may be deducted at the highest rate which may result in the employee paying more tax than they need to pay.
When starting a new job, employees have 28 days to provide their TFN before tax is deducted at the highest rate.
Generally, if a migrant to Australia intends to earn money in Australia, regardless of their age, it is to their advantage to apply for a TFN. If they do not have a TFN, they may have more tax withheld than is necessary.
