Are you considering studying in Australia? Great choice! You’ll get a quality education and can work part-time to support yourself. However, when it comes to the season of tax for international students in Australia, things can get a bit tricky, especially if it’s your first time dealing with Australian tax laws.
No worries, though; we’ve got you covered! We’ve gathered answers to some of the most common questions that international students have when it comes to paying taxes in Australia.
If you have been living in Australia for more than 6 months, you will be deemed an Australian resident for tax purposes and will need to submit a tax return. But here’s the good news: as a student, you may be entitled to a tax refund, and the average refund is $2,600!
Rules Regarding Tax For International Students in Australia
To help you go through this process, we have put together a guide with the most frequently asked questions about tax returns for international students working in Australia. So let’s dive in and make tax season a little less daunting!
Tax Payments in Australia for International Students
According to Australian law, if a student has been studying in this country for more than six months, he’ll be considered a resident who is required to pay taxes on the income he earns. The tax rate will be the same as for all other Australian residents.
Your employer is supposed to pay the tax to the Australian Taxation Office (ATO) for you on any amount you earn that is above AU$18,200 each year. Individuals earning below this amount are not required to pay tax.
Note: You can visit the Australian Tax Office (ATO) website and apply for a Tax File Number (TFN) .
Tax Rates for Australian Residents
Australia’s income tax system has different tax brackets based on taxable income. The income tax brackets for the 2023–24 financial year are as follows:
- If your income is between $0 and $18,200 per year, you are not entitled to pay tax in Australia as an international student.
- If you earn between $18,201 and $45,000, you will need to pay tax at the rate of 19%. This means that 19 cents will be charged for each dollar you earn over $18,200.
- If your income falls between the brackets of $45,001 and $120,000, the payable tax rate will be 32.5%. This means that you will have to pay an amount of $5,092 (32.5 cents will be deducted for each dollar).
- If your income is between $120,00 and $180,000, the tax rate is 37%. This means you will have to pay around $29,467 (37 cents are charged for each dollar over $120,000).
It is essential to know these tax brackets to calculate your tax liability accurately and plan your finances accordingly.
Are International Students Working in Australia Needed to File a Tax Return?
Yes!
If you are an international student in Australia who earns while studying, you need to file an Australian tax return. The main purpose of filing your Australian tax return is to confirm that you are fully compliant with the Australian Tax Office.
And what’s more?
By filing your tax return, you can claim your Australian refund!
How Can You Lodge Your Tax Return?
When it comes to doing your taxes in Australia, you’ve got a few options.
- You can handle it yourself by using the myTax online platform, which lets you prepare and submit your tax return electronically. It’s pretty convenient and can save you some money, as it’s free to use.
- Another option is to hire a registered tax agent to take care of everything for you. They’re professionals who know the ins and outs of the tax system, and they’ll charge a fee for their services. On average, this fee can range from about $100 to $280. But remember, only registered tax agents are allowed to charge you for this service.
If you prefer the old-fashioned way, you can always fill out a paper tax return and mail it in. In this case, you need to gather all your necessary documents:
- Your income statements
- Receipts for deductions
- Any information about your spouse’s income, if applicable
So, whether you’re tech-savvy, want some expert help, or prefer the pen-and-paper approach, there’s an option that fits your preferences when it comes to lodging your tax return in the Land Down Under.
Key Dates to File Your Tax Return
In Australia, a fiscal year that’s commonly known as a “financial year” (FY) begins on the 1st of July and ends on the 30th of June of the next year. By July 14, each year, employers usually give their employees the payment summary for the financial year that has just ended.
This payment summary will demonstrate the amount you earned, and the amount of tax paid by your employer for you from your pay to the ATO. The 31st of October is usually the deadline to lodge your own ‘tax return’ every year.
Note: Extensions can apply if you file your tax through a tax agent or accountant.
Who is Considered an Australian Resident for Tax Purposes?
Generally, anyone is considered an Australian resident for tax purposes if one has:
- been living in this country since their birth.
- come to Australia to live here permanently.
- been in Australia consistently for 6 months, and for most of that time, he has been working in the same job and living in the same place.
Where Can You Find Help?
If you need help or advice regarding the rules for tax for international students in Australia, book a consultation session with us and find out everything about Australian law for international students like you. Visa experts and student counselors at StudyWise are well-versed in all the Australian laws and regulations and will provide you with the best guidance.
By booking an appointment with us, get one step closer to witnessing your dreams of studying abroad turning into a beautiful reality.
Download Our App
Ready to Apply with StudyWise? Download App Now!
StudyWise is an AI-based app that was established in 2021 and is supported by the NSW Government. It offers complete assistance to students aspiring to study abroad. It simplifies the entire admission and visa process through digitalization.
By simply downloading it from the App Store or Play Store, you can get to know all the careers and courses that best suit your profile, skills and career goals.
FAQs:
Do international students in Australia get the tax back?
Yes. If you are working part-time in Australia while studying, you need to pay tax on these earnings. However, at the end of the tax year, you may be qualified for a student tax refund. In Australia, the average tax refund with Tax Back is $2,600, so you should keep checking what you are owed.
Is the first year tax-free in Australia?
If you are living in Australia, for the first year, you will have to pay no tax on the first $18,200 of your income. This period is known as the tax-free threshold.
What is superannuation in Australia?
Superannuation in Australia or “super” is a savings system for workplace pensions in retirement. It involves the process of money earned by an employee being placed into an investment fund. This money is then legally available to fund members upon retirement.
What if I am here for less than 6 months?
If your enrolled course lasts less than 6 months, and you intend to leave Australia following its completion, you will probably be considered a non-resident for Australian tax purposes. Still, you need to lodge a tax return declaring any Australian income you earned while here. However, you will not have to pay taxes.
Are international students in Australia permitted to earn income while studying?
Yes. The Australian government lets international students work up to 20 hours each week during the semester if they are on a valid student visa. However, during the summer break or other school holidays, students are permitted to work for unlimited hours.