If you have employees that are temporary residents or foreign workers, it is important to know the tax that applies and conditions the worker must meet, such as current work VISA – here is what the ATO says –
What you need to work in Australia –
To work in Australia you need a visa that allows you to work here. You should also have a tax file number (TFN).
Visas are issued by the Department of Immigration and Border Protection. You can check if your visa allows you to work by using the department’s free Visa Entitlement Verification Online (VEVO) serviceExternal Link.
Your TFN is your personal reference number in our tax system. You can apply for a TFN online once you have your work visa and have arrived in Australia. You should apply for your TFN before you start work or soon after.
You don’t have to have a TFN, but you pay more tax if you don’t have one. Getting a TFN is free.
If you think someone else has used your TFN or it has been stolen, phone ATO on 1800 467 033 (within Australia), between 8.00am and 6.00pm, Monday to Friday.
When you start a job –
Complete a Tax file number declaration
Your employer will ask you to complete a Tax file number declaration, which tells them your TFN and whether you are an Australian or foreign resident for tax purposes.
Your employer uses the information to work out how much tax to withhold from your wages. They should also provide your TFN to your superannuation fund so it can accept your superannuation contributions and pay the correct tax on them.
You have 28 days to provide a completed Tax file number declaration to your employer. If you don’t, they must deduct a higher rate of tax from your pay.
You should give your TFN to your employer only after you start work for them. Never give your TFN in a job application or over the internet.
Your employer deducts tax
Your employer will deduct tax from your pay and send it to us. This is called ‘pay as you go withholding’.
You can check how much tax should be taken from your pay.
Note: New working holiday makers tax tables apply from 1 January 2017
If you employ working holiday makers, new tax tables apply from 1 January 2017.
Working holiday makers include individuals who hold either a:
- working holiday makers visa (subclass 417)
- work and holiday makers visa (subclass 462)
- associated bridging visa.
For more information refer to Tax table for working holiday makers.
Superannuation (or ‘super’) is Australia’s retirement savings system. If you are a temporary resident, your employer should pay super contributions for you just as they do for eligible Australian resident employees.
It doesn’t matter whether you work full time, part time or casually.
Your employer must pay super contributions into a super fund on your behalf if you are paid A$450 (before tax) or more in a calendar month and you are either:
- 18 years or older, or
- under 18 and work more than 30 hours per week.
Your employer does not need to pay super for you if you are doing work of a private or domestic nature for 30 hours or less each week – for example, if you are employed as a nanny.
Compulsory employer super contributions are in addition to your salary. Most people can choose which Australian super fund these contributions are paid into.
You can use the Employee superannuation guarantee calculator to work out if you are eligible for super payments and how much your employer should contribute.
Cash payments and ‘contractor’ payments
Some employers prefer to pay in cash instead of to a bank account. This is okay, provided they still:
- deduct tax from the money they pay you
- give you payslips showing how much tax has been deducted
- pay super contributions on your behalf (if you’re entitled to super).
If they don’t do these things, you could get less pay and super than you’re entitled to.
Some employers may incorrectly treat you as a contractor or even encourage you to get an Australian business number (ABN). Having an ABN doesn’t make you a contractor. Only people who carry on a business can have an ABN.
If an employer offers to pay you in cash without deducting any tax or paying contributions into your super fund, report them to us by phoning 1800 060 062 (within Australia) between 8.00am and 6.00pm, Monday to Friday. You don’t have to give us your name.
When you leave a job
After the end of the income year (30 June), your employer will give you a payment summary. This shows how much you earned and how much tax was deducted from your wages. If you leave a job during the year, you can ask for your payment summary when you leave. Your employer must give it to you within 14 days.
After 30 June you lodge an annual tax return to tell us how much income you received and tax you paid. This information will be on your payment summaries. We then send you a notice of assessment and your tax refund if you are entitled to one.
If you’re leaving Australia permanently you may be able to claim your super.
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Email firstname.lastname@example.org or call 0407 361 596 Australia