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Income TaxBack to top Back to main Skip to menu
Australia - Income Tax
There are a number of criteria for assessing the residency status of a person in Australia. If the person’s main home is in the country or if they spend more than half of the tax year living there then they are considered to be residents. If a person makes contributions to a superannuation fund then they are also considered to be a resident.
There is a Pay As You Go withholding system for income tax in Australia but you are still required to file an income tax return. This system is used as a way to avoid getting a large tax bill once a year as your PAYG payments should cover the vast majority of it. These payments can be varied so that you can adjust them according to your income and outgoings.
All income is considered to be taxable including your main income from employment, any income earned from your own business, capital gains income and interest earned on savings and investments. If you are unsure how much you might be expected to pay then you can make use of the handy online calculators on the website of the Australian Tax Office before you complete your tax return. There are also a number of items for which you can make deductions and details on this and how to complete the tax return are also available from the website.
Processing your tax return can take up to 6 weeks if you send it in by mail. Those who have made use of the PAYG system may find that they are due a refund and you should have confirmation of this fairly quickly.
Income tax rates are progressive up to a level of 45%. For the tax year of 2010-11 the rates show that those who earn below $6000 do not pay income tax. For income between $6001 and $37,000 there is a rate of 15 cents for every dollar earned above the $6000 cut off. If you earn between $37,001 and $80,000 you pay $4650 plus 30 cents for every dollar earned above $37,000. For those who earn over $80,001 and $180,000 you pay $17,550 and an additional 37 cents for every dollar earned above $80,000. For anything over $180,001 you pay $54,550 and 45 cents for every dollar above $180,000.
Australia has a number of tax treaties in place with other countries including the UK, the US, France, Japan, Canada, New Zealand, Russia and South Africa, among others. The tax treaties prevent residents from being taxed on the same income in two countries.
Read more about this country
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