While you’re working in Australia, it’s important to understand tax considerations that could apply to you and your income. General information about some of those tax considerations has been provided below. Learn about tax file numbers and lodging a tax return in Australia.
Tax file numbers
Your tax file number (TFN) is a unique reference number issued by the Australian Taxation Office (ATO). It isn’t compulsory to have a TFN, but you may be asked for it by your employer or by NAB when opening a bank account.
If you don’t provide your TFN:
- you may have income withheld at the highest margin tax rate plus Medicare Levy (see below for further information about witholding tax).
- you may have additional income tax withheld from employer contributions to your super account.
- you might not be able to make personal contributions to your super fund.
- you may be ineligible for super co-contributions from the Government.
You can apply for your TFN through the ATO website.
Withholding tax is generally applied to interest and investment income and wages earned in Australia. There are two kinds of withholding tax:
- non-resident withholding tax
- resident withholding tax where a TFN isn’t provided.
Non-resident withholding tax
If you aren't an Australian resident you'll likely be charged a withholding tax on any interest you may earn on an Australian bank account. For residents, this is a final tax on the interest.
Resident withholding tax where a TFN isn’t provided
If you're an Australian resident (eg. you live in Australia) and you choose not to provide your TFN to your bank, your bank may need to withhold (at the top marginal tax rate, plus Medicare Levy) interest earned on your bank account. Any withholding applied to you in this case, will be a credit to you against any tax payable by you on your income, at the end of the financial year.
If you don't provide your TFN when you first open an account, you can still provide this at a later time. However, withholding tax will be applied to interest payments on your account up until the time your TFN is provided.
Completing a tax return
If you’re not a resident of Australia, you'll likely be taxed as a non-resident, though this does depend on your circumstances. Non-residents need to file an income tax return for any Australian income earned, other than interest and dividends (eg. you have a rental property or Australian salaries and wages).
There are many factors taken into account by the Australian Taxation Office when determining whether someone is a resident of Australia. Some factors are:
- you’ve come to Australia and you live here permanently
- you’re an overseas student
- you’re visiting Australia for more than six months, and you work in the same job and live at the same place for most of that time.
If you're unsure of whether you're a resident, we recommend seeking independent tax advice. The ATO has information to help you check if you're an Australian resident for tax purposes.
Australian residents generally need to lodge a tax return for each income year ending on 30 June, if (among other reasons):
- tax has been withheld on their income; or
- their taxable income exceeds the tax-free threshold.
If you're unsure of whether you need to lodge an Australian tax return, we recommend seeking independent tax advice.