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  • Tax in Australia: what you need to know

    Why we pay tax

    Tax is money people and businesses pay to the Australian Government to provide services including:

    • health
    • education
    • defence
    • roads and railways
    • social security and other payments from Centrelink.

    As Australians we enjoy access to a good health system, quality education and a variety of community facilities (for example, parks and playgrounds) which are supported through tax collections.

    Permission to work in Australia

    If you are a foreign resident, you must get permission from the Department of Home Affairs before you start work in Australia. Home Affairs can provide you with useful information including which visas allow you to work in Australia.

    For more information about permission to work in Australia contact Home Affairs.

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    How much tax you will pay

    The amount of tax you pay depends on:

    • whether you are an Australian resident for tax purposes
    • how much income you earn
    • whether you have a tax file number (TFN) – this is a personal identity number which you should tell your employer.

    If you begin work before you have a TFN, you have 28 days to get one and give it to your employer. If you don't, your employer must take tax from your pay at the highest rate.

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    Getting a TFN

    Before starting work we recommend you get a TFN otherwise you'll pay more tax. We issue TFNs to individuals, businesses and other organisations for identification and record keeping purposes.

    Applying for a TFN

    There are various ways to apply for a TFN. How you apply will depend on your circumstances.

    To find out more about how to apply, go to:

    If you are migrating to Australia or hold a temporary resident visa that allows you to work in Australia, you can apply for a TFN online.

    To apply online, go to:

    When completing your application, you will require documents that prove your identity.

    It can take up to 28 days to process your TFN application, and send your TFN to your address.

    Keeping your TFN safe

    Your TFN is with you for life, so keep it secure. You keep the same TFN even if you change your name or address, change jobs, move interstate, or go overseas.

    Don't let anyone else use your TFN, even friends or relatives. Allowing someone else to use it, giving it away or selling it is a crime.

    Only give your TFN to:

    • us when discussing your tax records
    • your employer after you begin work, but don't provide it on job applications
    • your bank or other financial institutions
    • Centrelink
    • your registered tax agent
    • your superannuation (super) fund.

    Report any loss, theft or misuse of your TFN to us immediately by calling 1800 467 033.

    Keeping your TFN and other personal identity details secure helps prevent identity crime. Identity crime happens when people's identity details are used to commit crimes.

    Scam emails, faxes, SMS and phone calls can look and sound very convincing. Be aware and if you're unsure a communication is from us call our scam hotline 1800 008 540.

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    Australian business numbers (ABN) are for business

    Not everyone is entitled to or needs to have an ABN to work in Australia. Having an ABN means you:

    • are running your own business
    • have to pay your own tax to us
    • may need to pay for your own super
    • may not be insured if you're injured.

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    Lodging a tax return

    You need to lodge a tax return to tell us:

    • how much income you have earned from working, or from interest on bank accounts or investments
    • how much tax has been withheld, so how much money is taken out of your pay by your employer and sent to us
    • about any deductions you are claiming.

    As an individual you must lodge a tax return if:

    • you paid tax during the tax year (1 July to 30 June)
    • your taxable income (including Centrelink allowances or payments) exceeded certain thresholds for residents - see Do you need to lodge a tax return or for more information on thresholds, phone us on 13 28 61
    • you are a foreign resident and earned $1 or more in Australia during the tax year (excluding income that had non-resident withholding tax withheld)
    • You must also complete and lodge a tax return if you are leaving Australia permanently or for more than one tax year.

    To lodge your return, you will need an income statement or payment summary.

    Income Statement

    If your employer has started using single touch payroll (STP), your payment summary information will be called an 'income statement' in myGov. This is the equivalent of your payment summary (some people may still refer to it as a group certificate).

    Your employer is not obliged to give you an end-of-year payment summary for the information they report through STP (the law has changed). Your payment summary information will now be available online in MyGov. We’ll send a notification to your myGov inbox when your income statement is ‘tax ready’ so you can complete your tax return. If you use a tax agent they will receive the information they need to complete your tax return. This has not changed.

    You’ll be able to contact us for a copy of your income statement if you do not have access to your myGov Account. You can continue to lodge your tax return as you do now.

    Payment summary

    If your employer is not yet reporting through STP they will still provide you with a payment summary:

    • within two weeks of the end of the tax year (30 June)
    • when you finish work.

    You can help make sure you receive all your payment summaries by providing all your employers with your postal or email address.

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    Do I need to lodge a tax return?

    Complete and lodge your tax return

    Lodge online using myTax

    You can lodge online using myTax. It is the quick, easy, safe and secure way to lodge online.

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    Lodge using a registered tax agent

    You can use a registered tax agent to prepare and lodge your tax return. You can find a registered tax agent, or check whether a person is a registered tax agent, by visiting the Tax Practitioners boardExternal Link.

    Extra help to lodge

    If you need help to lodge your tax return, you might be able to use the Tax Help program.

    Tax Help is a group of ATO-trained and accredited community volunteers who provide a free and confidential service to help people complete their tax returns online using myTax. It's available from July to October, in all capital cities and many regional areas across Australia.

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    When to lodge

    If you are preparing and lodging your own tax return, you must lodge it by 31 October. If you are using a tax agent for the first time or a different agent to last year, you must contact them by 31 October.

    If you don't lodge your tax return and pay any amounts you owe us, you may have to pay penalties.

    Work-related expenses

    Work-related expenses may be tax deductible if you have spent money on something to help you earn your income. You must be able to show that:

    • the expenses directly relate to earning income
    • the expenses are not private in nature
    • you have a record to prove your expenditure.

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    Record keeping

    When you lodge your tax return, we process it and work out whether you have paid the right amount of tax. We let you know the result by sending you a notice of assessment. Generally, you must keep records such as receipts for any deductions you claim for at least five years from the date you lodge your tax return.

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    Superannuation

    Super is Australia's retirement savings system. It is money set aside over your working life to provide for your retirement.

    When starting a new job, it's important for you to understand how super works and to know your rights and entitlements. Decisions you make now and in the future will affect your lifestyle when you retire.

    Compulsory employer super contributions are in addition to your salary. Most people can choose which Australian super fund these contributions are paid into.

    Generally, if you are paid $450 or more in a calendar month, your employer must contribute a percentage of what you earn into a super account for you.

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      Last modified: 24 Jun 2019QC 57521