Paying tax in Australia

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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