When you move to Australia, you might need to understand how the taxation and superannuation systems work, especially if you’ll be working while you’re here. Learning about these may help you get settled sooner and help you avoid problems later.
In Australia, taxes are used to pay for roads, healthcare, education and welfare. When you’re working, your employer will take tax out of your salary and pay the Australian Taxation Office (ATO). The financial year runs from 1 July to 30 June. At the end of each financial year, you may need to lodge a tax return to report income and claim deductions.
You must pay tax if you work in Australia, earn money from investments, or receive income from overseas. If you live in Australia and work, you’re usually considered an Australian resident for tax purposes – even if you’re not a permanent resident or citizen. This means you need to pay tax on all income, including income from overseas.
In Australia, the more money you earn, the more tax you pay. The amount of tax you pay will also depend on whether you have more than one job.
You can earn up to a certain amount each year without paying tax. As of May 2025, the income tax brackets in Australia are:
These rates might change, so be sure to visit the ATO website to check the current rates.
Most employers pay wages into a bank account. You might want to open a bank account in Australia when you arrive. With a Westpac Choice everyday account, you can access your cash and shop securely online using a linked debit card. The monthly fee is waived for the first year if you open your account within 12 months of arriving in Australia.
A tax file number (TFN) is a unique number given to you by the ATO. You may need a TFN to start a job, lodge a tax return, apply for government benefits, or to open a bank account. Without a TFN, you may pay more tax on your income.
It is free to apply for a TFN. You can apply for a TFN online on the ATO website.
At the end of each tax year, most people need to lodge a tax return. This is a summary of how much you earned and how much tax you paid. If you paid too much tax, you may get a tax refund. If you didn’t pay enough, you may need to pay more.
You can lodge a tax return online yourself or you can use a registered tax agent. A registered tax agent will charge a fee to complete your tax return. The ATO provides free help to lodge a tax return for people earning under $70,000.
When you lodge a tax return, you might be able to claim deductions. This means you can subtract some of your expenses from your income so you pay less tax.
Some deductions might include work-related costs such as uniforms, study expenses related to your job, or donations to charities. It’s important to keep receipts for every deduction you want to claim.
Here are some quick tips that may help you to stay organised:
There are a number of websites and resources to help with understanding tax and super in Australia. These include:
Understanding tax and superannuation in Australia can be confusing at first. There are many resources and guides for new migrants, especially on the ATO website. Taking the time to understand it now could save you time later. Understanding tax and super may also help you manage your money better and avoid costly mistakes.
This information is general in nature and has been prepared without taking your personal objectives, circumstances and needs into account. You should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.
The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.