Tax basics – individuals
Tax file number (TFN)
Your tax file number (TFN) is your personal reference number in the tax and super systems. TFNs are used to identify your tax records. It’s important to keep your TFN secure.
Everyone has a different TFN. Your TFN is yours for life, even if you haven’t used it for many years, changed jobs, gone overseas or changed your name.
Applying for a TFN
You can apply for a TFN by visiting the Office of the Administrator and completing a Tax file number - application or enquiry for individuals (NAT 1432) form. You should bring one original primary proof of identity document, such as a birth certificate, passport or Australian citizenship certificate, and two secondary documents, such as drivers licence, marriage certificate, or bank statement.
Please note that Norfolk Island residents are unable to follow the Australian resident process for applying for a TFN.
Do you need to lodge a tax return?
As an individual you must lodge a tax return if you receive income from a job, running a business or other sources (including government allowances or payments from Centrelink).
If you’re unsure, use our tool Do I need to lodge a tax return?
If you are an employee, tax is withheld from your salary or wages. Your employer will give you a form (called a Tax file number declaration) to complete. They use this information to work out how much tax to deduct from your pay. When you complete this form you will be asked if you want to claim the tax free threshold from that payer or employer.
If you have more than one job, and you are sure that your total income for the year from all your employers will be less than the tax-free threshold ($18,200), you can claim the tax-free threshold from all of your employers.
If your income for the year from all your employers will be more than the tax-free threshold ($18,200), you can only claim the threshold from one employer. Generally, you would choose the one you expect will pay you the most during the financial year.
To ensure you are not disadvantaged by having too much or not enough tax withheld, you can complete a PAYG withholding variation application form. You should only complete this form if you are certain of the income amounts.
Medicare gives Australian residents access to health care and is partly funded by taxpayers who pay a Medicare levy of 2.0% of their taxable income.
From 1 July 2016 residents of Norfolk Island who are Australian citizens will be eligible for Medicare and may have to pay the Medicare levy.
The Norfolk Island exemption will not apply from 1 July 2016.
The Medicare levy and any reductions are calculated from information provided in your tax return.
You can claim deductions on your tax return for expenses directly related to earning your income. These deductions reduce your taxable income - the amount on which you pay tax.
Tax offsets (sometimes referred to as rebates) directly reduce the amount of tax payable on your taxable income.
For example, all residents of Norfolk Island who are eligible can claim the zone tax offset fixed amount of $1,173. This fixed amount can be increased if you care for a dependent child or student or you are a sole parent.
Capital gains tax
A capital gain or capital loss on an asset is the difference between what it cost you and what you receive when you dispose of it.
On 23 October 2015 changes to CGT for Norfolk Island residents were announced, however legislation about this has not been finalised. More information about this will be available soon.
If you earn income from a job or from other sources, you may need to pay tax. The amount of tax you pay depends on how much you earn, and whether you have a tax file number (TFN). We provide information on how to get a TFN and how to prepare and lodge your tax return.