Many of our working students ask about taxation in Australia. The following information is taken from the Australian Taxation Office – ATO website.
If I am a working holidaymaker, do I have to lodge a tax return?
Most working holidaymakers visiting Australia for only a short time are tourists or travellers and are not Australian residents for tax purposes. If you have been paid a salary or wages in Australia, you are required to lodge an income tax return.
The Australian tax year ends on 30 June. You should lodge your tax return by 31 October, unless you have been granted an extension to lodge until a later date.
You will have to pay more tax if you didn’t pay enough while you were working.
If too much tax was withheld from your pay, you will get a refund.
It can take up to six weeks to process your tax return, so make sure you write an address on your tax return where the tax office can send your notice of assessment.
If you are leaving Australia before the end of our tax year, refer to Leaving Australia at ato website
Completing your tax return as a non-resident
Once you have determined your residency status, you will be in a position to give a correct answer to the question asked on page one of the Tax Pack return form, namely ‘Are you an Australian resident?’
Where your status has changed during the year of income from resident to non- resident, you still need to answer ‘yes’ to this question as you would have been an Australian resident for part of the year. This ensures you are taxed at resident rates for the tax year. Your non-residency for part of the year is taken into account by a reduction in your tax-free threshold. You are entitled to a pro- rata tax-free threshold for the number of months you are an Australian resident.
Non-residents of Australia are not required to pay the Medicare levy, so you can claim the number of days that you are not an Australian resident during a tax year in your return as exempt days.
What is the effect of being a non-resident?
Non-residents pay tax differently from residents. As a non-resident you will:
- have 10% of any interest earned from your Australian bank accounts withheld for tax. This interest is not included as assessable income. You need to advise the Australian financial institution of your overseas address so that this tax can be withheld otherwise tax will be withheld at the higher rate of 46.5%
- not pay the Medicare levy. You also may not be entitled to claim Medicare benefits
- not be entitled to the tax-free threshold - approximately $6000
What tax rates apply?
The tax rates that apply to both resident and non-residents are detailed in Individual income tax rates.
Residents
Tax rates 2009-10 if you are a Resident for Tax Purposes
|
Taxable income |
Tax on this income |
|
$1 – $6,000 |
Nil |
|
$6,001 – $35,000 |
15c for each $1 over $6,000 |
|
$35,001 – $80,000 |
$4,350 plus 30c for each $1 over $35,000 |
|
$80,001 – $180,000 |
$17,850 plus 38c for each $1 over $80,000 |
|
$180,001 and over |
$55,850 plus 45c for each $1 over $180,000 |
If you are a non-resident for the full year, the following rates apply:
|
Taxable income |
Tax on this income |
|
$0 – $35,000 |
29c for each $1 |
|
$35,001 – $80,000 |
$10,150 plus 30c for each $1 over $35,000 |
|
$80,001 – $180,000 |
$23,650 plus 38c for each $1 over $80,000 |
|
$180,001 and over |
$61,650 plus 45c for each $1 over $180,000 |
To check if you are a resident for tax purposes please see the ATO website
