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  • Working as an employee

    Employees have both rights and obligations. When you leave or change jobs – or take a second job – your rights and obligations may change, just as they will if you move overseas, or if you leave the workforce or retire.

    While you're working, you must pay income tax on payments you receive from your employer. Your employer will deduct tax from your pay and send it to us.

    At the end of the financial year you need to lodge a tax return. You may receive a refund after claiming any deductible expenses to which you are entitled. Your employer will generally be required to pay super contributions for you.

    On this page:

    Starting your job

    Your employer is required to withhold tax on your behalf from your wages and, in most cases, to pay super into your super account.

    When you start a job, you need to make sure that you have a tax file number (TFN) and that you've completed a TFN declaration. Your employer uses your TFN declaration to work out how much tax to withhold from your pay.

    Next steps:

    See also:

    What your employer must do

    Your employer will withhold tax for you from your wages and send it to us.

    Most employers are now required to report your income, tax and super information at the same time they pay you. This reporting change is called Single Touch Payroll (STP).

    If your employer is not yet reporting their tax and super information through STP, they will continue to give you a payment summary (as they do now). They're required to provide this to you by 14 July.

    If your employer reports through STP, they are no longer required to provide you with a payment summary. You will receive an income statement.

    The income statement replaces the payment summary you would usually receive at the end of the financial year. Most employers have until 14 July 2020 to finalise their data. However, some employers have until 31 July 2020 to finalise their data.

    You will need a myGov account linked to ATO online services to access your income statement. If you don’t have a myGov account you will be able to contact us for a copy of your income statement – see, Working holiday makers.

    Your payment summary or income statement contains information you will need to help you complete your tax return.

    We produce tax tables and calculators to help your employer work out how much to withhold from your payments (you can use these if you want to check how much tax should be withheld from your pay).

    Generally you will have super contributions paid in addition to your salary or wages. Your employer must make these contributions on your behalf.

    Some people receive fringe benefits as part of a salary package. These are a non-cash benefit either you or an associate, such as your spouse or children, receive because of your employment. Benefits can be provided by your employer, or sometimes by your employer's associate or a third party under an arrangement with your employer.

    Your employer should provide a work place free of unlawful discrimination and promote diversity. If you’re a working parent, have carer responsibilities and/or a disability, you should discuss ways your employer can support you.

    See also:

    Paying tax

    You pay income tax on your salary and wages, most Centrelink payments, investment income from rent, bank interest or dividends you receive, profits from selling shares or property and income from your business.

    The amount of income tax and the tax rate you pay depends on your circumstances and how much you earn. The more you earn, the higher your rate of tax.

    If you're an Australian resident, the first $18,200 you earn is tax free, although in some circumstances this is reduced. You can claim the tax-free threshold when you complete your TFN declaration.

    If you earn additional income (for example, from a second job or a taxable pension) your second payer is required to withhold tax at the higher, 'no tax-free threshold' rate. Otherwise you might have a tax debt at the end of the financial year.

    You may also need to pay a Medicare levy, generally 2.0% of your taxable income.

    If you have an accumulated Higher Education Loan Program (HELP), Student Start-up Loan (SSL), Trade Support Loan (TSL), VET Student Loan (VSL), or Student Financial Supplement Scheme (SFSS) debt, you need to include this information on your TFN declaration. Depending on how much you earn, you may have to make repayments on this debt as part of your income tax payment.

    You need to lodge a tax return each year. You may be eligible to claim tax deductions for expenses you directly incur in earning your income. However, you cannot claim the cost of normal domestic or private expenses.

    See also:

    Super contributions

    When you start a job you need to:

    • choose a super fund for your employer to pay your super into
    • make sure that your super fund has your TFN to minimise the tax paid on your super contributions.

    When you change jobs, or have more than one job at a time, be sure to keep track of your super.

    Check that your super fund has your TFN. If your super fund does not have your TFN they may not accept the payment or will deduct extra contributions tax. It is also easier for them and you to keep track of your super accounts.

    See also:

    While you are working

    You and your employer both continue to have these tax and super obligations while you are working.

    Your day to day working arrangements may include:

    Last modified: 01 Jul 2020QC 43436