When someone from any other region comes to Australia to earn money, they only have the intension to work as much hours as they can. Because there are no working hour limits in Australia, and most importantly, you can make huge amount by working in Australia because the country is very expensive. But you also have to know about these Australia Income Tax System Truths before You Come To Australia to earn money. So, it will make you understand how much you should earn and in which ratio you have to give tax to the Australian Government.
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Australia Income Tax System
As I already mentioned that there are no working limitations in Australia. So you can earn your best by giving your effort. But you also have to remember that the taxes are also not be calculated as cheaper as you think.
The taxes are very high and most importantly, at the end of the year, whatever you will earn, you have to give tax to the amount. This means, the more you earn money, the more you have to provide taxes on it.
So, if you are coming to Australia to come australia for working purpose, lets be aware. The Government will take extra amount if you earn extra.
But at the very beginning, when someone from outside comes to Australia and start earning money, they are not familiar with the Australia Income Tax System, how much they have to pay as taxes at the end of the year.
Alike, every country has their own identification card, Australia has it’s own regulation also. If you come to Australia, you have to apply for TFN number and secondly, ABN number.
TFN number stands for Tax File Number and ABN stands for Australia Business number.
Difference Between TFN and ABN
Let’s make it simple. TFN (tax file number ) is like a unique number enrolled by the Income Tax Department.
If you are working as an employee in a company, that means your salary will be paid under TAF system. Means, you don’t have to pay taxes at the end of the year. Whatever you will get paid as salary every month, usually paid after the deduction of all the taxes. So, you don’t have pay extra at the end of financial year.
On the another hand, if we talk about ABN , here you will get lots of unexpected surprises.
Surprises??? Yaah. I am telling you why. First, I would want to mention which category of people will be liable for ABN.
When you are not working as an employee, like you are a delivery boy, normal service boy, driver even if you are a business man, then this ABN will be applicable to you.
In this scenario, whatever dollar you will get or earn at the end of month usually don’t come at your account after the tax deduction. So, you will have to pay tax separately for your income at the end of every financial year.
So, If you are not familiar with the Australian Financial year month, then let me tell you that the Financial year starts from 1st of July and ends on 30th of June.
Australia income tax system: Tax Deduction Process
Here is the main process how much you will have to pay to the Governement in case you have diferent ration of income. Let me clarify,
A. If your Annual Income is from $0 to $18,000 , then you will never have to pay anything except the medicare and suprer annuation charges (Retirement Fund).
B. If your annual income is from $18,001 to $45,000 , then you will hvae to pay 19% for each $1 over $18,200.
C. If your annual income is somewhere from $45,001 to $1,20,000, then ypu will have to pay $5,092 plus $32.5 percent for each $1 dollar over $45,000.
D. If you are earning annually between $1.20.001 to $1,80,000 , then you will have to pay $29,467 plus $37 percent for each $1 dollar over $1,20,000 . If you are coming to australia for study and to esrn , then your income will fall under this section.
E. If you are earning more than $1,80,000, thne you will have to pay 45% of your annual income over $1,80,000.
Track Or Consult
So, when It comes to Taxes, then you have to be very careful. If you have prior knowledge about Taxes, then you should keep your records because, you have to pay an exact figure depending on your annual income. Otherwise, you will end up by giving over or under payment to the Australian Governmenet.
If you are not familiar with the Taxation, then You must consult to a chartared Accountant. They will help you by figuring out the amount you have to pay as taxes to the Ausralian Governemt. Yah, they will charge a minimal amount of fee for this. But , It will create difficulities in future If you make any fault while paying taxes to the Government.
There is a small disclaimer that If you think that you will never pay Taxes to the Government, then you will be regreting later for sure.Australia income tax system is build in that way, so that you can not do anything wrong with that.
Australian Taxation Office (ATO) tracks your everything related to your income and expenses through your TFN and ABN. So, If you are ended up by not paying taxes to the Government , then You will have to face so many problems in Future.