Paying tax in Australia

Paying tax in Australia

MOVE TO AUSTRALIA | It is said that there are two certainties in life; death and taxes. The latter in Australia shouldn’t be a mystery to you and understanding what is required of you and how it all works go a long way to alleviating the aches and pains that usually accompany managing your tax affairs.


Income Tax in Australia

ALL Australian residents have to submit an income tax return annually. This can either be done by you using the very useful Australian Tax Office (ATO) e-tax software application, or engaging the services of a registered accountant (the fee can be claimed against the following year’s tax return).

All income earners in Australia must have a ‘Tax File Number’. You can register for one with the ATO as soon as you move to Australia.

Australia employs a nationwide progressive income tax system, similar to that used in Britain.

For the 2012/2013 tax year, the rates are as follows (these don’t include a Medicare levy of 1.5%):

Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000

Should you have assets, such as houses and investments, it is advisable to speak to your financial advisor (such as at The Commonwealth Bank of Australia) about how best to structure those assets in order to minimise your taxable income.

Australia’s Medicare Levy

The Medicare levy, which helps pay for the national health system in Australia, is deducted at 1.5% of your taxable income. You are able to register for Medicare one week after moving to Australia, at a Medicare Office.

Compulsory Superannuation

You are also required to pay a minimum of 9% of your income into a superannuation retirement fund. This is similar to National Insurance. See: Superannuation and pensions in Australia.

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Move To Australia

Move To Australia

Move To Australia is presented in association with Commonwealth Bank of Australia, helping with all your banking and foreign exchange needs.