Overview of Tax
Financial Year
The Australian
financial year is from 1 July to 30 June.
Tax Returns
By 31 October each
year, all Australian taxpayers must complete a tax return -
"the TaxPack". This is a self-assessment system, whereby
each taxpayer declares their income and allowances to arrive at
their own tax liability.
Tax File Number (TFN)
Every Australian
resident with earnings from employment or investment needs a Tax
File Number (TFN). You should apply for your TFN soon after
arrival - either at a Tax office, a Centrelink office or online.
Your TFN will be allocated and sent to you within 10-28 days, but
if you get work in the meantime, just tell your employer you have
applied, so you don't get taxed on a higher rate.
Australian Business
Number (ABN)
If you run a
business, you will normally be required to register for an
Australian Business Number. You will also have to register for the
Goods and Services Tax (GST) if your turnover exceeds $50,000 per
annum.
Income Tax
Employment
Employers are
required to deduct income tax directly from their employees'
salaries each pay period (each month or fortnight).
| Taxable
Income (Australian$) |
Tax
Payable
(Australian$) |
| |
|
| 0
- 6,000 |
Nil |
| 6,001
- 25,000 |
Nil
+15% of excess over $6,000 |
| 25,001
- 75,000 |
$2,850
+ 30% of excess over $25,000 |
| 75,001
- 150,000 |
$17850
+ 40% of excess over $75000 |
| 150,000+ |
$47,850
+ 45% of excess over $150,000 |
Self-Employment
Those in business
for themselves are required to complete a quarterly Business
Activity Statement (BAS) to account for their business tax, GST,
superannuation fund payments etc. The system is known as "Pay
As You Go" (PAYG).
Investment Income
Individuals with
investment income (such as rental income or dividends from shares)
greater than $1000, will normally have to complete a quarterly
Instalment Activity Statement, and pay the tax due. This also
comes under the "Pay As You Go" (PAYG) scheme. You can
change to one annual payment if your PAYG tax is less than $8000.
Other Taxes
Capital Gains Tax (CGT)
Capital Gains on
assets such as shares or investment property are included in the
assessable income and taxed at the individual's highest rate of
tax. However, if the asset has been held for at least one year,
the liability is reduced by 50%. see
ATO for more ...
Goods and Services
Tax (GST)
GST was introduced
in July 2000 and is applied at 10% to most goods and services. For
the individual there is nothing to do (except pay it!).
Businesses, however, must register and charge GST if their annual
turnover exceeds $50,000. The business must account for GST on its
sales and purchases and pay the difference to the ATO on a
quarterly basis. see
ATO for more ...
