Everyone in Australia who has worked is required to lodge a tax return, regardless if you are citizen or not. Generally speaking an international student who is living in Australia for more than 6 months, then you are considered an Australian resident for tax purposes.
The financial year in Australia runs from the 1st of July, until the 30th of June. However if you leave Australia before the end of the financial year, then you can complete a tax return for the year in advance and lodge it with the ATO.
Apply for an Australian Tax File Number:
The very first thing a student should do when arriving in Australia is apply for a tax file number (TFN). A tax file number is similar to a social security card in The States, or a National Insurance Number in the UK. Basically it is used for tax purposes and working holiday makers must have at least applied for their TFN before beginning work.
if you do not register for a tax file number (TFN) you will be taxed at a rate of 47%, so be sure to register as soon as you arrive.
Applying for a tax file number is easy and can be done online. Check out this government link for the application for a tax file number.
How to Lodge your Tax Return:
After the end of the Australian income year (30 June), you lodge an annual tax return to tell us how much income you received and tax you paid. The Australian Tax Office will then send you a notice of assessment and your tax refund if you’re entitled to one. International student can lodge their ta returns online through this link online. Usually this is the easiest way to lodge your tax return. However you can also lodge using a paper form or through a tax agent.
The Australian income year ends on 30 June. You have from 1 July to 31 October to lodge your tax return for the previous income year. Lodging online with myTax is the quick, easy, safe and secure way for you to prepare and lodge your own tax return. The deadline to lodge your tax return is 31 October.
When you lodge your tax return be sure to apply for all the deductions that you are eligible for. This includes everything from clothing, computers, books, and phones, footwear etc. If you lodge through a tax agent they may be able to maximise your returns.
What do I need to lodge my tax?
The most common documents required to lodge a tax return include:
- Tax File Number
- Payment Summaries from previous employers
What this means is that you will be given a “Payment Summary”. This is a statement of earnings for the financial year from this employer.. This outlines how much money you have made for the financial year & how much tax you have paid. A lot of the time you pay more tax then you need to and most people who are working a part time or in a low income job will get a Tax Refund. A Tax Refund is money back from the government if you have paid too much tax or have tax deductions that you are able to get reimbursed for.
A full list of documents required to lodge the visa is found here
What is a Tax deduction?
Tax deduction is a reduction of the income subject to tax, for various items, especially expenses incurred to produce income. Often these deductions are subject to limitations or conditions.
Basically what this means is if you have spent money to pay for things to do with your job. E.g. Uniforms, Union Fees, RSA/RCG, Work related Courses, Safety Equipment (safety boots, high visibility vest, etc), Stationary, Tools, Travel records between jobs and work sites, Uniform and Laundry receipt.
Items & services like this are all tax deductible. You could get a large percentage of this money back in your Tax Refund.
What if I don’t have receipts for my Tax Deductions?
If you don’t have receipts it is always advisable to talk to an accountant. Sometimes there are thresholds of money you can claim without having to show receipts. It is important not to be dishonest when doing your tax return. The Australian Taxation office does numerous audits every year on random and suspicious Tax Returns. You could risk big fines if you are found out to be falsely claiming Tax Deductions.
Am I better off doing my tax myself or using an tax agent?
Accountants usually charge a low fee for doing Tax Returns. Some even just deduct the money they charge straight from your tax return, so you never have to physically hand over any money. The other benefit of going through an accountant is that they understand all the thresholds and deductions available to you and your situation. This is the best way to get as much out of your Tax Refund as you can.
If you’re enrolled to study in Australia in a course that lasts for six months or more, you’re generally regarded as an Australian resident for tax purposes. This means:
- You pay tax on your earnings at the same rate as other residents
- You’re entitled to the benefits of the Australian tax system, such as:
- the tax-free threshold (or part of it, if you’re here for only part of the financial year)
- tax offsets
- generally lower tax rates than a foreign resident.
Generally Australian residents must declare all income they’ve earned, both in Australia and internationally, on their Australian tax return. However, as an overseas student you probably have a temporary visa, which means you’re a temporary resident.
How to claim my tax when I go home:
If you are leaving Australia permanently before the end of the income year (30 June), you may be able to lodge your tax return early. In this case you must lodge a paper return, which takes longer to process. Alternatively, you can wait until after 30 June and you can lodge your return online from your home country.
Any super contributions paid by your employer must remain in your super fund account while you are in Australia.
You can claim your super after you leave if you:
- You were in Australia on a student visa
- had super contributions paid by an employer while you were in Australia
- have left Australia and your working visa has either expired or been cancelled.
Before your super is paid to you, your fund will deduct tax.
Superannuation and getting your and superannuation refund:
Superannuation in Australia is for paid by employers for “retirement pension contributions.” Employers must pay superannuation for all employees of roughly 9% of wages per week. Non-residents can receive 70% of this superannuation back when they leave Australia. You can apply to receive you superannuation back online here. You will however need to list the name of your superannuation fund used by your employer, so be sure to ask.
Just to give you an idea of what kind of money you can expect to receive I will give you an illustration below.
A student might make $15000 throughout their time in Australia. Employers would contribute 9% of $15000 = $1350 to different superannuation funds on your behalf. This would mean you would receive $1350 x 70% = $945 back! So it is well worth doing the work before you leave.
A student should contact all former employers and ask for the following things:
- A Group Certificate (a tax payment summary).
- The name of the superannuation fund which the employer uses and the working holidayers employee membership number.