Tax in Australia In Australia, tax is paid out of money you earn from a job, business or investment. The Australian Taxation Office (Tax Office) collects taxes from individuals and businesses to pay for important community services like hospitals, schools, roads and railways.   The amount of tax you pay depends on the income you earn, whether you are a resident for tax purposes, and whether you have a tax file number (TFN). A TFN is a personal identity number that you must keep secure.   In general, you will be considered as an Australian resident for tax purposes if you: have come to Australia and live here permanently, are an overseas student, or are visiting Australia for more than six months, work in one job and live at the same place for most of that time.   Tax and individuals Before you start work, you should apply for a TFN from the Tax Office. A TFN is a unique number issued to individuals and organisations for identification and record-keeping purposes. If you don’t have a TFN, your employer must take the maximum amount of tax from payments made to you. It’s important you keep your TFN secure. Allowing someone else to use your TFN, selling it or giving it away can cause serious problems for you.   If you are working, your employer automatically takes tax out of your salary or wages. At the end of each financial year (every June 30), your employer will issue you with a document called a “payment summary” that shows how much you earned and how much tax was taken from your pay. You use your payment summary to lodge a tax return with the Tax Office by 31 October each year. If you are considered a resident of Australia for income tax purposes, your tax return must show all sources of income including income you earned overseas.   You may be able to reduce the amount of tax by claiming some deductions and tax offsets.   Tax and individuals Superannuation is Australia’s name for pension or retirement savings. If you are an employee, your employer is generally required to pay amounts, called contributions, into a superannuation account for you. These contributions are in addition to your salary and wages. Your superannuation money cannot be cashed before you retire, unless you permanently leave Australia.   Medicare levy The Australian government gives Australian residents access to health care called Medicare. To help fund the scheme, resident taxpayers are subject to a Medicare levy if they earn a certain amount of income.   Your business and tax To get your business started in Australia, you will need to choose the business structure that best suits your needs. There are four main types of business structure in Australia: n         sole trader n         partnership n         trust, and n         company   You will need to get a tax file number (TFN) and you may also need to an Australian business number (ABN) for your business.   A TFN is a number that we issue to you, your partnership, trust or company. You need a TFN for identification purposes. It’s an important form of identification in Australia so keep it secure, as you would your passport or bank account details. If you don’t have a TFN, you may have to pay tax at the highest rate, regardless of your income.   An ABN is the number you use when you deal with other businesses, government and the Tax Office. If you don’t quote an ABN on your invoices, other businesses will deduct 46.5 percent from any payments they make to you.   Goods and services tax The GST is a tax of 10% on most goods and services sold in Australia. You must register for GST if you are in business and your current or projected annual turnover is $75,000 or more or you provide taxi travel.   More Information To help businesses and individuals understand their tax entitlements and obligations, the Tax Office offers a range of help and assistance products. This includes English and in-language publications, seminars, online information and face-to-face visits. Also available is a free DVD/online product called “Tax in Australia – what you need to know”. This offers basic information on the tax system, TFNs, income tax lodgement and more. It’s available in 10 languages including English.   For more information: The Australian Taxation Office Website: www.ato.gov.au Telephone: 132 861 (in Australia) Email: diversity@ato.gov.au