How is salary calculated in Australia

Taxes Australia: TFN, Tax Return, Tax Rates & lots of tips

The topic "Taxes Australia“Is of interest to anyone who wants to work on the 5th continent. And anyone who thinks Germany is the only “bureaucrats' paradise” is wrong. In Down Under, too, taxes are a crucial source of income in the country and must of course be paid by every employed person. In the following chapters you will find out exactly how taxes are in Australia and what is necessary to get your refund.


Tax number: Tax File Number (TFN)

You need a Tax File Number (TFN) to:

  • to be allowed to work
  • to change a job easily
  • open a bank account
  • to pay the right tax rate
  • to use state advantages
  • request a tax refund
  • submit a tax return
  • to join the pension fund (superannuation fund)

Everyone who works in Australia is required to pay income tax. Even short-term jobs (see: Work and Travel) therefore have to apply for a tax number or the so-called “Tax File Number” (TFN) at the Australian Taxation Office (ATO) and hand over part of their earned money to the Australian Tax Office. However, the nine-digit TFN, which is valid for a lifetime, also brings something good with it, as it means that you do not have to pay the "emergency tax" of 45%.

It is essential to mention that it is worthwhile to receive the TFN as soon as possible, as it must be available to the employer no later than 28 days after starting work. If this is not the case, the maximum rate just mentioned applies. The TFN can be applied for either from home via a specialized agency, online on site (Australian address required) or upon presentation of the application form, passport and the relevant work permit at the responsible ATO offices.


TFN application quickly and cheaply from home

It is highly recommended that you apply for the TFN from home through a specialized agency. This gives you the opportunity to start looking for a job immediately after arriving in Australia and to be allowed to work legally. In addition, you save the local waiting for your TFN, which can quickly take up to 4 weeks.

If you want to avoid the waiting time and any bureaucratic effort, you can apply for the tax number for a small fee from our experienced partner. This very convenient and value-for-money service makes sense for anyone considering working on the 5th continent.


Tax return: Tax Return

The employer automatically deducts the wage tax to be paid from the salary and sends it to the tax office. If the financial year expires or the employment relationship is terminated, you will receive a "Payment Summary". This is a statement drawn up by the employer in which the taxes can be seen and which are absolutely necessary for any repayment ("tax return"). In Australia, the tax year does not end at the end of the year, but on June 30th. So it lasts from July 1st to June 30th of the following year. The tax return forms are available from all ATO head offices or on the ATO website under the heading "What do you want to do? (CLICK HERE). You can do the tax return online, submit it to the ATO or send it to the ATO. This should usually happen between July 1st and October 31st.

If you really want to have the best possible repayment refunded on your tax return, you are in good hands with our partner. Here you get one free tax refund estimate and can be assisted by a professional team at the Have tax refund assist. By Click on the following picture you have the option to find out all the important information on the topic and to contact one of the advisors without obligation.

Note: The average tax refund with the help of our partner is $ 2,600!

Further important information about the company, the process, the advantages and the fees incurred can be found in the following article.


Information on tax refunds at a glance

  • The Australian tax year starts on July 1st of the year and ends on June 30th.
  • You have to be in Australia for 6 months or 183 days to claim tax back.
  • You need your PAYG or the last pay slip to get taxes back.
  • The tax file number (TFN) must be given to the employer within the first 28 days in order to avoid paying "emergency tax".
  • As soon as you have left Australia, you can claim back the superannuation refund.
  • You are obliged to submit your "tax return" at the end of the tax year.
  • The entire Australian income tax refund process takes approximately 6 to 8 weeks.

By the way: The value added tax in Australia is called GST ("Good and Service Tax") and is 10%. But not all goods and services are affected by the GST. The so-called TRS ("Tourist Refund Scheme") allows the GST of some goods to be reclaimed under certain conditions via the Australian Customs. For this purpose, the corresponding TRS counters are located at all international airports in Australia.


Tax rates: Tax Rates

Unlike workers with permanent residency or Australian citizenship, there is no exemption limit for workers with a temporary work visa. Here you will be asked to pay for a full 29%. As in Germany, the tax rate in Australia depends on the amount of income. Here is an example of the Tax year 2018/2019:


For citizens & "residents"

  • 0 - $ 18,200 A: Tax free
  • 18.201 $ A - $ 37,000 A: $ 0.19 A for every A $ 18,200 earned over A $ 18,200 (0 - 9.65%)
  • $ 37,001- $ 90,000 A: $ 3,572 A + $ 0.32.5 A for every A $ earned over $ 37,000 A (9.65-23.11%)
  • 90.001 - $ 180,000 A: $ 20,797 A + $ 0.37 A for every A $ earned over $ 90,000 A (23.11 - 30.05%)
  • $ 180,001 A +: $ 54,097 A + $ 0.45 A for every A $ earned over $ 180,000 A (30.05 - under 45%)

For "non-residents"

  • 0 - $ 90,000 A: $ 0.32.5 A per dollar earned (32.5%)
  • $ 90,001 - $ 180,000 A: $ 29,250 A + $ 0.37 A for every A $ 80,000 A earned (32.5 - 34.8%)
  • $ 180,001 A +: $ 62,500 A + $ 0.45 A for every A $ earned over $ 180,000 A (34.8 - under 45%)

If you want to know exactly how high your taxes are to be paid in Australia, you can do this using the ATO - Simple Tax Calculator.

Note: The “resident for tax purpose” status also enables “non-residents” to pay the same taxes as Australians and “residents”. This requires proof that you live permanently in one place in an apartment and that you are socially integrated. With the so-called "residency test" you can check online whether the "resident for tax purpose" status applies to you. If this is the case and you have paid too much, you will receive this back via "tax return".


Important news: Information for Work & Traveler

Since January 1st, 2017, Work & Travelers have had to pay tax on their entire earnings (it is no longer possible to obtain "resident" status!). While there used to be an exemption limit of AUD 18,200, it has now been decided in Canberra that all income is taxable without exception. However, the tax rate is not 32.5% as originally planned, but only 15% (from the first dollar).


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