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  • Starting work

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    Basis of your employment

    When you start working, you need to know if you are an employee, contractor or working for yourself. You may need to:

    Your income and paying tax

    If you have an employer

    When your employer pays your salary or wage, they take out tax and send it to us. Your payslips will show how much tax has been taken out.

    Some employers deposit your pay into your bank account, but others will pay you cash. Either option is okay, so long as they take the right amount of tax from your pay and send it to us. Your employer is also required to pay superannuation into a super fund you nominate. Your payslips will show how much tax and super your employer contributes. If your employer doesn’t do these things, you could be getting less pay and super than you should.

    When you lodge your tax return

    When you lodge your tax return at the end of the financial year, we calculate how much tax should be paid on your income less the amount your employer has sent to us. The financial year runs 1 July to 30 June. At the end of the financial year you will be able to see your total salary and tax taken out from your pay on your income statement. You can access your income statement through ATO online services in myGov.

    Tax-free threshold and tax rates

    If you're an Australian resident, the first $18,200 you earn is tax free. This is known as the tax-free threshold. You can claim the tax-free threshold when you complete your TFN declaration with your employer. If you earn less than $18,200 for the entire financial year you generally don't have to pay any tax. If your employer withholds any tax from your pay and your income is below the tax-free threshold these amounts can be refunded to you when you lodge your tax return.

    You can generally only claim the tax-free threshold from one employer. If you have more than one employer, you should claim the tax-free threshold from the employer that pays the highest salary or wage.

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      Last modified: 08 Jun 2021QC 63023