How much tax should I pay in Australia?

When working in Australia your employers are required to withhold tax from your salary and pay this to the Australian Tax Office. At the end of the financial year or when you leave Australia you may be entitled to claim a large proportion of these tax payments back – See Backpacker Tax Returns.

Your employer will work out how much tax to withhold based on information you provide in your tax file number declaration form, when you start work. If you do not provide a tax file number, your employer will be required to withhold tax at the top marginal rate, including Medicare (currently 46.5%). Travellers Contact Point offers a free TFN Application Service, click here for details.

You can also use the 2014-15 tax tables below as a rough guide of how much tax will be withheld. To acertain if you are a Resident for tax Purposes, click here.

Resident for tax purposes

Taxable incomme Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $80,000 $3,572 plus 32,5c for each $1 over $37,000
$80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000

Non-resident for tax purposes

Taxable incomme Tax on this income
0 – $80,000 32,5c for each $1
$80,001 – $180,000 $26,000 plus 37c for each $1 over $80,000
$180,001 and over $63,000 plus 45c for each $1 over $180,000

Labour hire arrangements

Some working holiday travellers are recruited in construction / harvesting industries under labour hire arrangements. In these instances the labour hire firm contracts with the worker and pays the worker. The worker is not an employee of the client and there is no contract between the worker and the client. The worker may or may not be an employee of the labour hire firm.

Under a labour hire arrangement, the labour hire firm will be required to withhold amounts from a payment made to the worker (at the normal salary and wages rates) and provide the worker with a PAYG payment summary – business and personal services – following the end of the financial year.

Tax file number declaration

Your employer will ask you to complete a Tax file number declaration. This form asks you to quote your tax file number as well as provide other information which assists your payer to calculate the amount of tax to withhold from your pay.  If you do not provide a tax file number, your employer will be required to withhold tax at the top marginal rate, including Medicare (currently 46.5%). Travellers Contact Point offers a free TFN Application Service, click here for details.

If you are paid under a voluntary agreement, i.e WWOOFing, you are not required to complete a tax file number declaration.

Tax-free threshold

If you are a classed as a resident for tax purposes, you do not pay tax on the first $18,200 of your income (this is known as the ‘tax-free threshold’). You can claim the tax-free threshold from only one payer at any one time.