GENERAL TAX, GST AND SUPERANNUATION INFORMATION APPLICABLE TO AUSTRALIAN INDIVIDUALS…IN PLAIN ENGLISH
Below you will find a basic summary of what you can expect when you start earning income in Australia.
The details are not exhaustive, so if you are unsure or confused, please contact me for further information.
There are basically two types of tax applicable to Individuals in Australia
• Income Tax
Australian Resident Individuals that earn income from anywhere in the world (both Australian and international income)
are taxed per the rates set out below.
Tax rates 2012 – 13
The following rates for 2012-13 apply from 1 July 2012.
(NB/ Medicare Levy details not provided)
Taxable income Tax on this income
Up to $18,200 Nil
$18,201 to $37,000 Tax is 19% of the part over $18,200
$37,001 to $80,000 $3,572 + 32.5% of the part over $37,000
$80,001 to $180,000 $17,547 + 37% of the part over $80,000
$180,001 and over $54,547 + 45% of the part over $180,000
Examples of income include – Wages, interest on bank accounts, dividends from shares, income from running a
To lodge an Australian Income tax return you must first apply for a Tax File Number TFN.
At the end of each financial year, if you have worked for anyone as an employee, you will receive a PAYG Payment
Summary. This information will show your wages paid to you for the financial year and how much tax your employer has
paid on your behalf.
Tax Tip: It is a good idea to check your last pay slip with the PAYG Payment Summary that you receive to ensure that your
employer has put the correct information on it. Also, if you are salary sacrificing any wages, this amount should not appear
in the Gross Wages section of your PAYG Payment Summary.
Full Time employees are generally entitled to 20 days annual leave and 10 days personal/sick leave each year. The
minimum requirements for all workers in Australia are covered by the National Employment Standards (NES).
Superannuation of 9% on Ordinary Time Earnings (basically your regular wages) is required to be paid on behalf of all
employees, including some subcontractors* (see below), to a complying superannuation fund within 28 days after the end
of each quarter.
The due dates for the payment of Superannuation are as follows, and must be strictly adhered to by employers:
– September quarter: 28th October – December quarter: 28th January
– March quarter: 28th April – June quarter: 28th July
Tax Tip: It is a good idea to check your superannuation online on these dates to confirm that your employer has actually
paid your superannuation. If money is tight with employers, it is often staff superannuation that is not paid when it is due. If
you believe your employer is not paying your superannuation, call the ATO on 13 10 20 to speak to them about getting your
*Subcontractors and Superannuation – If you are paid under a contract that is wholly or principally for labour, your employer
has to pay super contributions for you. This is even if you quote an Australian business number (ABN) to your employer,
as this type of contractor is considered an employee for Superannuation guarantee purposes.
Generally, a contract is principally for labour if more than half of the value of the contract is for the person’s labour, which
• physical labour
• mental effort, or
• artistic effort.
GST – BUSINESSES
GST is applicable on business income where your expected annual turnover is greater than $75,000 p.a..
If you meet the GST turnover threshold of >$75,000 p.a. you must register for GST. If your turnover is under the turnover
threshold, it is not mandatory to register for GST (unless you are a taxi driver).
Where you are registered for GST, 1/11th of your income must be paid to the Australian Taxation Office (ATO). You can,
however, reduce the amount payable to the ATO by the GST you have incurred on your business purchases (where you
have a tax invoice and the supplier is also registered for GST).
ABN – Australian Business Number
Regardless of whether or not you are registered for GST, if you are running a business you must first have an ABN. If you
do not, then anyone that you perform services for and issue an invoice to, will be required to withhold 46.5% of your
income until you supply them with an ABN.
If you trade under your own name (your given names and/or initials followed by your surname) you don´t need to register it.
However, you need to register if you:
• add anything to your name
• do not use any part of your name
• use a completely different name.
Examples where registration is necessary
• Trading name: Pacific Lawns; Owner: Alan Jones
• Trading name: A Jones Lawn Mowing; Owner: Alan Jones
• Trading name: A Jones and Associates; Owners: Alan Jones and John Laws
A business name is the name under which your business trades and it needs to be registered in every state where
trading takes place (i.e. if you trade in Queensland and NSW, you will be required to register your name with both state
If a company trades under a registered company name (with ASIC), its name doesn’t need to be registered.
However, if it trades under a name even slightly different to its name registered with ASIC, it does need to be registered
with the State Government body.
Examples where registration is necessary
• Trading name: Alpha Investments; Owner: Alpha Investments Pty Ltd
• Trading name: Sam’s Swim School; Owner: ABC Pty Ltd