The Australian tax system works pretty similar to New Zealand. The Australian Tax Office/Department is the equivalent of the IRD in New Zealand.
Your employer will pay tax to the Australian Tax Department/Office on your behalf. If you are self employed you will need to file your own tax returns, so you will need to get an Australian tax accountant to help you file everything correctly.
On this page you will find the following information:
A Tax File Number (TFN) is the Australian equivalent of the New Zealand IRD number. You do not need to have a TFN to work and pay Australian tax, however you will be charged at a higher tax rate. The Australian tax year runs from the 1st of July through to the 30th of June.
You should apply for a tax file number Aus as soon as you arrive in Australia. You are not able to apply from New Zealand. You can apply online here: https://www.ato.gov.au/individuals/tax-file-number/apply-for-a-tfn/foreign-passport-holders,-permanent-migrants-and-temporary-visitors—tfn-application/.
You can apply for a tax file number online if you meet these three conditions:
You should receive your TFN within 28 days after your interview. The Australian Taxation Office (ATO) will mail your TFN to the postal address on your application. Your patience during the processing period is appreciated. Please do not lodge another application during this time.
We get asked how long to get an Australian tax file number regularly. You should receive your TFN within 28-30 days. The ATO will send your TFN to the Australian address you use on your application.
As a New Zealander living in Australia on a CSV it is easiest for you to apply online (https://www.ato.gov.au/individuals/tax-file-number/apply-for-a-tfn/foreign-passport-holders,-permanent-migrants-and-temporary-visitors—tfn-application/).
Please note you can start working without a TFN but you might get taxed a higher amount until it comes through.
Please find below a table containing the Australian individual income tax rates.
The following rates for 2018–19 apply from 1 July 2018.
|Taxable income||Tax on this income|
|0 – $18,200||Nil|
|$18,201 – $37,000||19c for each $1 over $18,200|
|$37,001 – $90,000||$3,572 plus 32.5c for each $1 over $37,000|
|$90,001 – $180,000||$20,797 plus 37c for each $1 over $90,000|
|$180,001 and over||$54,097 plus 45c for each $1 over $180,000|
The above rates do not include the:
|Taxable income||Tax on this income|
|0 – $90,000||32.5c for each $1|
|$90,001 – $180,000||$29,250 plus 37c for each $1 over $90,000|
|$180,001 and over||$62,550 plus 45c for each $1 over $180,000|
You will pay the above foreign resident tax rates until you receive your tax file number. As a New Zealander you will be given a TFN upon application.
The above rates include changes implementing changes announced in the 2018-19 Federal Budget.
Foreign residents are not required to pay the Medicare levy.
Once you have your TFN you will pay the same tax rate as a Australian resident or citizen.
The standards the ATO use to determine your tax residency are not the same as those used by the Department of Immigration and Border Protection – for example, you could be an Australian resident for tax purposes even if you’re not an Australian citizen or permanent resident.
To understand your tax situation you first need to work out if you are an Australian or foreign resident for tax purposes. You can do that here using the ATO’s ‘Are you a resident?’ tool: https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=AreYouAResident&anchor=AreYouAResident&anchor=AreYouAResident/questions#AreYouAResident/questions.
The below links will take you to the Australian tax calculator on the Australian Tax Department/Office website. This calculator will help you to calculate the tax you owe on your taxable income for the previous three income years.
It will estimate your tax payable and will also calculate:
It will take these, along with other tax credits, into account in estimating your tax refund or debt.
https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=STC&anchor=STC#STC/questions – this calculation will take between two and 10 minutes to complete.
A tax agent or accountant can help you lodge your tax return, claim more deductions and get you more tax back.
Using a professional tax accountant has many benefits and unless your an accountant it’s a must. Tax returns can be tricky and tax agents can help you prepare and submit your tax returns.
Tax agents liaise closely with their clients to help them claim as many deductions as possible and get the biggest tax return. They can also help and provide advice for managing your taxes throughout the year.
If your finances are straightforward (for example, your only income is from an employer and you have few or no deductions to claim), try doing it yourself online via myTax, which is similar to MyIR with the IRD.
You can find accountants in your area by searching online.
You can also ask for recommendations from family and friends. It is useful to find an accountant in your area so you can personally see them.
After you have created a shortlist of accountants, contact each of them and find out:
If you’re happy with the answers to all these questions you’ll feel more confident working with the accountant.
The IR886 form tells the IRD you are leaving, or have left New Zealand so they can tell you your tax residence status and if you have any further New Zealand tax obligations. It also includes the IR597 form you can use to elect someone in New Zealand to act on your behalf.
Also inform the IRD of your new address in Australia when you have one. It is easiest to do this online. Click here to register for the IRD’s online service, which means you can easily update your address while overseas and continue to be informed about things like student loan repayments or other tax obligations you may have.
If there is anything else you would like to know about, please ask me a question using the below comment system and I will do my best to find the information you need.