A brief overview to Lodging Tax Returns for International Students in Australia
Studying abroad is an exciting and transformative experience, and for many international students in Australia, part-time work is a crucial aspect of their time abroad. However, navigating the Australian tax system can seem daunting but the steps to follow are quite simple:
First – identify if you are classed as a resident ‘for tax purposes’ which in a nustshell can be defined as …
Second – understand how much tax you pay in your payslip and why its so important to claim your entitlements back at the end of the financial year.
There are two separate rates of tax in Australia – one is for residents and the other is for non-residents.
Non-residents pay 32.5% tax starting from the first dollar they earn and there is no tax-free threshold available.
Meanwhile, residents pay 0% on their first $18,200 and 19% from $18,200-$37,000
Third – To pay tax, and be eligible for any refund, the first step is ensure you have a TFN! (Tax File Number)
1 . Before you start working, you’ll need to apply for a Tax File Number (TFN) from the ATO. The TFN is a unique identifier that allows the government to track your tax and superannuation (retirement savings) contributions. You can apply for a TFN online, and it usually takes around 28 days to receive it.
2. Maintaining accurate records of your income and expenses is crucial for lodging your tax return. Keep track of your pay slips, payment summaries, bank statements, and receipts for any work-related expenses you may incur, such as uniforms, equipment, or professional memberships. Having organized records makes the tax-filing process much more manageable.
3. Your residency status determines the way your income is taxed in Australia. Non-residents pay 32.5% tax starting from the first dollar they earn and there is no tax-free threshold available. Meanwhile, residents pay 0% on their first $18,200 and 19% from $18,200-$37,000
4. When the tax year ends on June 30th, it’s time to lodge your tax return. You have until October 31st to lodge it, but the earlier, the better. There are several ways to lodge your tax return: online through myTax (ATO’s online lodgment system), using a registered tax agent, or by paper form. For most international students, myTax is the simplest and most convenient option.
5. Ensure you include all your income sources in your tax return. This includes your wages, salary, tips, scholarships, dividends, and any other income earned during the tax year. It’s important to report your income accurately to avoid penalties or audits.
6. As a taxpayer, you may be eligible to claim deductions for certain work-related expenses. Common deductions for international students can include textbooks, stationery, internet bills (if used for study), travel expenses related to work or study, and professional development courses directly related to your field of study. Keep in mind that deductions can only be claimed for expenses that are necessary for your work or study.
7. Seek Professional Advice – If you find the tax-filing process complex or have specific circumstances, consider seeking professional advice from a registered tax agent. They can provide personalized guidance, help you identify eligible deductions, and ensure compliance with the tax laws. Though there might be a fee involved, it can be a worthwhile investment to maximize your refund and gain peace of mind.
For more information visit the official ATO website.