They say the only two things that are certain in life are death and taxes. The latter certainly holds true in this situation. Fortunately, the Australian tax system is relatively easy to follow and in most cases you can deal with the Australian Taxation Office through their website. This includes lodging tax returns and applying for a Tax File Number. The ATO website also provides information and advice on all tax related matters.
Australian employers and employees use the Pay As You Go (PAYG) system. This means that your employer will withhold your tax from your regular earnings on your behalf. At the end of the financial year (June 30), you will have to lodge a tax return. The outcome may see you receiving a refund for excess tax you have paid throughout the year, or having to pay more.
Some people choose to voluntarily pay more tax to ensure they are not left with a bill at the end of the financial year. The ATO website has a simple but comprehensive tax calculator you can use to ensure you are paying the right amount. Depending on your situation, you may also be entitled to benefits and tax breaks. It is a good idea to have a thorough look through the ATO website to make sure you are receiving all your entitlements.
Tax File Number
An Australian Tax File Number (TFN) is an essential requirement for gaining employment in the country. Your employer will use your TFN to ensure that you are being charged the correct amount of tax. Without a TFN, you may also be denied benefits to which you would otherwise be entitled. Additionally, if you hold an Australian interest account, you will need to declare your TFN to prevent being charged tax on the interest you earn.
A TFN is an important identification tool, similar to an American Social Security number. You may need to use your TFN when dealing with the Australian Taxation Office or other government bodies. In some cases, banks require a TFN when you open an account. Your TFN will prevent you paying any unnecessary tax and can also protect you against identity theft.
You may apply for a TFN if you have a working visa, permanent migration visa, valid overseas student visa or valid visa to live in Australia. There is no fee involved. The benefits of obtaining a TFN are far reaching so even if you are not planning on working it is still a good idea to have one. You can do so by visiting the ATO website, or by calling them between 8.00am and 6.00pm Monday to Friday.