Taxes and Superannuation
You will need to get a Tax File Number (TFN) to work in Australia. You can apply for TFN online by yourself on the Australian Taxation Office’s website here. Tax File Number (TFN) is an 8 or 9 digit number issued by the Australian Taxation office to identify you. You will be issued TFN only once in your lifetime and it won’t change for the rest of your life.
Working on cash is illegal in Australia. However, if you decide not to have a TFN, your employer will need to deduct higher taxes from salary or wages (usually around 46.5%) Usually, your employer deducts taxes from your salary and pays to the Australian Taxation Office (ATO).
If you are going to work and earn more than $18,200 per year then you must be filing your taxes. The financial year runs from 1st July to 30th June each year in Australia. The last date for filing taxes for individuals is 31st October.
You can file the taxes:
- By yourself online using myTax (MyGov account)
- By paper-based tax return
- Using ATO’s Tax Help Program
- Using a registered tax agent
After filing your tax return, you usually need to wait around 2 weeks for getting your refund from the Tax office.
As an overseas student who is studying for more than 6 months in Australia, you may be considered as a resident for tax purposes which means you are paying lower taxes. If you are considered non-resident or foreigner, you will have to pay higher taxes from the very first dollars you earn in Australia.
For the year 2018-19, the tax rates are as follows:
Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $90,000 $3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000 $20,797 plus 37c for each $1 over $90,000
$180,001 and over $54,097 plus 45c for each $1 over $180,000
As an overseas student, you are not eligible to use Medicare in Australia, so don’t have to pay Medicare levy on your taxes (which is an additional 2% charge on your taxes). However, you must apply for a Medicare exemption certificate before filing your taxes here.
If you would like to know more about taxes, we have created this infographic for the commonly asked questions for taxes in Australia.
Superannuation is different from taxes as it is money for your retirement. It is the money you accumulate over your working life for your retirement. By law, your employer must pay you 9.5% superannuation on top of your salary if you earn more than $450 per month in your salary or wages. You cannot withdraw this money until you retire or turn 65 years old or leave the country permanently.
Employers usually have to pay this money to your nominated super fund account every three months (quarterly). Some students have a misconception that is deducted from your salary or wages but it not and is paid on top of your salary and wages.
If you decide to leave the country permanently, then you should claim this money but you can only claim it after you actually leave the country and your visa is expired or canceled. This is payment is also known ads Departing Australia Super Payment (DASP)
It is actually recommended to start the process/application of DASP before you leave Australia as you will need to provide certified documents for your application. You can submit your claim after you arrive in your home country and your payment will be made after deducting the taxes and fees.
Some of the documents and personal information you might need for this application are:
- Personal Details
- Contact Details
- Passport Number
- Super Fund Details
- Employer Details
- Tax File Number
- Certified copies of Passport showing your personal details
- Certified copy of visa expiration or cancellation evidence
- Departure stamp on your passport
If you would like to know more about Superannuation, we have a video guide that explains the topic really well. Check it out here.