WHAT INTERNATIONAL STUDENTS SHOULD KNOW ABOUT TAX RETURN IN AUSTRALIA?
With the option of working while studying in Australia comes the duty of paying income taxes for international students. It is usually a must to pay tax on the income that you earn when in Australia if it is more than the $18,200 threshold. However, almost every international student working in Australia can claim an income tax refund as the financial year comes to a close. If you are working for 20 hours per week in Australia with a student visa, you may be earning less than the tax-free limit of $18,200 here.
If you fail to file the document by the tax return deadline Australia, you might have more time to submit it if you seek the help of an agent in this regard. Here, we will discuss some more important pieces of information that international students have to know about tax return Australia.
WHAT ARE THE TAX RATES FOR RESIDENTS?
| Taxable Income | Tax on Income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 cents for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
The above rates do not include the Medicare levy of 2%.
RESIDENT VS NON-RESIDENT
Am I an Australian resident or non-resident for tax purposes? And why does it matter?
Essentially, this will affect how much tax you pay. Non-residents get taxed at a higher rate than residents in Australia. The main requirement to be deemed a resident for tax purposes is that you have continuously resided in Australia for a period of 183 days (6 months).
If you have enrolled in a course that lasts for less than 6 months, and you intend to leave right after you finish, you will be considered non-resident for tax purposes.
The main difference between being taxed as a resident or a non-resident is that non-residents pay 15% on their first $18,200 and residents pay 0% on their first $18,200 and 19% from $18,200 – $45,000.
If you are considered a non-resident you are still required to lodge a tax return. However, you won’t be able to claim the tax-free threshold of $18,200 and a higher tax rate applies onto your earnings. If you’re studying in Australia for a duration of six months or more, you’re generally regarded as an Australian resident for tax purposes.
Australian resident for tax purposes
HOW DO I LODGE MY TAX RETURN?
In order to file your tax return and claim your tax back you will need:
FREQUENTLY ASKED QUESTIONS
If you file your tax return online, your refund will typically be processed in 2-4 weeks. Early tax submissions (paper returns) take 6-8 weeks.
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.
A tax file number (TFN) is your personal reference number in the tax and superannuation systems in Australia.
To avoid being emergency taxed when you start working you need to provide your tax file number (TFN) to your employer within the first 30 days. You can apply for TFN for free directly with the Australian Tax Office here
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 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.
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.
Superannuation in Australia is for paid by employers for “retirement pension contributions.” If you earn over $450 a month, your employer is legally obliged to pay 9.5% of your basic earnings into a superannuation fund for you.
Yes, non-residents can claim a refund of 70% of this superannuation back when they leave Australia. You can apply to receive you superannuation back online here.
You will need to list the name of your superannuation fund used by your employer, so be sure to ask. Below is an example of how much you may claim back:
A student makes $15000 throughout their time in Australia. Their employers would contribute 11% of $15000 = $1650 to different superannuation funds on your behalf. This would mean the student would receive $1650 x 70% = $1155 back! A student should contact all former employers and ask for the following things:.
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