The Australian tax system works pretty similarly 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 helpful information:
The Double Tax Treaty (DTT) between New Zealand and Australia is an agreement signed by both countries to avoid double taxation of income earned by their respective residents.
The DTT outlines the rules for determining which country has the right to tax specific types of income earned by individuals and businesses operating in both countries. The DTT aims to eliminate double taxation, reduce the tax barrier to cross-border trade and investment, and promote economic activity between the two countries. It also includes provisions for the exchange of information to assist in the prevention of tax avoidance and evasion.
The DTT covers a range of areas, including income from employment, investments, royalties, and pensions. The agreement also includes provisions for resolving disputes that may arise between the tax authorities of the two countries.
Overall, the DTT helps to provide greater certainty and predictability for individuals and businesses who are active in both New Zealand and Australia. It helps to ensure that they are not unfairly taxed in either country due to their cross-border operations.
You can read more on the Inland Revenue website on Double tax agreements (DTAs), or speak to your accountant.
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 a higher tax rate. You can start working without TFN and inform your employer that you have applied for one, but they may still use the higher tax rate until your TFN comes through. The good news is that you may be able to claim the overpaid tax, you can find more info about tax refunds below.
A TFN will get you in line with the PAYG (pay as you go) earn scheme, which means that your Australian employer will withhold and report tax under your TFN. Same as NZ.
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 for a tax file number online if you meet these three conditions:
You can apply through the Australia Taxation Office (ATO) by completing the online form on the ATO website, print the summary and then book an interview at a participating Australia Post retail outlet. You will need to take your printed summary and proof of identity documents to the interview.
You should receive your TFN within 28-30 days. The ATO will send your TFN to the Australian address you use on your application.
Please note you can start working without a TFN, but you might get taxed a higher amount until it comes through.
Once you have received your TFN it’s important that you keep it and all your personal information secure to prevent identity theft.
If you already have a TFN and don’t remember the number, you can find it online in ATO online services via your myGov account: https://my.gov.au/.
If you don’t have a myGov account, you can usually find your TFN on:
If you use a registered tax agent/accountant, you can ask them for your TFN. If you still can’t find your TFN after checking these options, phone the ATO.
New Zealand citizens are treated as residents for tax purposes once they complete a stay of six consecutive months in Australia (183 days).
Please find below a table containing the Australian individual income tax rates.
|Taxable income||Tax on this income|
|0 – $18,200||Nil|
|$18,201 – $45,000||19c 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%. You can work out your Medicare levy using the calculator on the ATO website.
If you do not stay in Australia for six months (183 days) you will be treated as a foreign resident for tax purposes. This means that you are not allowed to use the tax-free threshold in your return (earn under $18,200) and you will be charged the starting tax rate of 32.5%. You would be eligible to claim a tax refund only if your Australian employer withholds more than 32.5% in tax and you will get the difference, meaning only the overpaid amount of tax. TaxBack.com can help you with this.
|Taxable income||Tax on this income|
|0 – $120,000||32.5 cents for each $1|
|$120,001 – $180,000||$39,000 plus 37 cents for each $1 over $120,000|
|$180,001 and over||$61,200 plus 45 cents for each $1 over $180,000|
Once you have your TFN you will pay the same tax rate as an 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.
You do have the option to be an Australian “temporary resident” for tax purposes.
There can be some benefits for New Zealand citizens living in Australia to be considered temporary residents for tax purposes. This is because, as temporary residents, they may be eligible for certain tax concessions and exemptions, including:
You can read more about this in Beyond Accountancy’s post: NZ taxes: something every Kiwi in Australia needs to know.
However, it’s important to note that these benefits depend on individual circumstances and may not apply to all temporary residents. It’s always best to consult with a qualified tax professional who can provide tailored advice based on your specific situation.
|If you’ve ever worked Down Under, you probably paid tax and are due an Australian tax refund.|
This calculator is FREE to use and will give you an instant Australian tax refund estimation. The average Australian tax refund with taxback.com is AU$2,600 so it’s well worth checking out the online tax calculator now.
Use TaxBack’s Australian tax refund estimator now and you are one step closer to getting your Oz tax refund!
Australian tax calculator facts
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The Australian financial year runs from 1 July until 30 June each year. Individuals have until 31 October to lodge tax returns on their own. If you use a tax agent, you can secure an extended deadline.
New Zealand citizens are not required to lodge a tax return if they have not commenced paid employment or stayed in Australia for less than six months and the only source of Australian income was bank interest, dividends or royalties (from which non-resident withholding tax has been correctly withheld).
You must lodge a tax return if any of the following apply:
The main reason people submit a tax return is to claim overpaid tax and get a tax refund.
If your finances are straightforward (for example, your only income is from one 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. Find here instructions to help you complete your tax return using myTax – https://www.ato.gov.au/Individuals/myTax/.
For more info, read my post Filing your Australia Tax Return.
Lodging a tax return can be daunting if you are not a professional. To ensure maximum legal refund and compliance with the Australian Authorities you should use an Australian Tax Agent/Accountant. Thus you can guarantee yourself a simple and easy process that will involve as many tax deductions as possible and a larger tax refund amount in the end.
You can find accountants in your area by searching online. Make sure you check the tax and BAS agent register before you go ahead with any service.
If you are planning on starting your own business and working as a sole trader or contractor, or sub-contractor, you need to apply for an Australian Business Number or ABN. Same as you would apply for a New Zealand Business Number (NZBN) in NZ.
ABN is a unique 11-digit number that identifies your business or organisation to the government and community.
To apply for such you must have obtained a Tax File Number first.
You can apply for ABN by registering directly with the Australian Government – https://www.abr.gov.au/business-super-funds-charities/applying-abn.
Taxback.com can also help with this matter to ensure a trouble-free application. Check out more information on their webpage – ABN application. Service fee applies.
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.
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