Tax
The Australian Tax system
is known to be one of the most complex. However, it is not too dissimilar
to the UK tax system, albeit with a few differences. The main ones being
that the tax year runs from the start of July to the end of June and individuals
must complete their own tax returns (usual due before the end of October for the
previous financial year)
Tax Rates
The tax rates have a 5 tier system as opposed to the 3 tier system used in the UK. For
the term 2010-11 are as follows:
- $1 - $6,000 - No tax to pay
- $6,001 - $37,000 - 15c for ech $1 over $6,000
- $37,001 - $80,000 - $4,350 plus 30c for ech $1 over $37,000
- $80,001 - $180,000 - $17,850 plus 37c for ech $1 over $80,000
- $180,001 and over - $55,850 plus 45c for ech $1 over $180,000
So if you earned $40,000 in the tax year, your tax owed would be $4,350 + 30c *
$4,999 = $5,849.70
This DOES NOT include the Medicare levy which must also be applied
to your takings. This is currently set at 1.5% of your taxable income
and is used to fund the Medicare scheme that gives Australian residents access to
health care. Also, if you earn alot of money, you may have to pay the
extra Medicare Levy Surcharge
(calculated at 1% for 2009) if you do not have private health cover. Check
with an accountant as it will most probably work out cheaper to have the private
health cover than not too!
PAYG
Pay As You Go works the same as PAYE in the UK, in that
your employer will tax you at source and will pass on the tax and Medicare Levy
to the Australian Tax Office. They will not; however; do your tax return
for you!
Expenses
The Australian system allows individuals to claim for all kinds of expenses that
are accumulated by yourself in order to earn that salary. Even the cleaning
of your work clothes can be claimed for! The Australian Tax Office have a dedicated
section on their website for tax deductions
Accountants
Given the complexity of the tax return and the requirment to submit your own tax
return. We would recommend that you get an accountant to do the work
for you. Most accountants will offer a fixed price for you to handle
your tax return and they know the system far better than you ever will!
In terms of what you can claim back there are many things such as work clothes,
washing of work clothes, purchases of items used for work, health payouts over $1,500
in the tax year, car use for work purposes and many more. Again, please
talk to an accountant to understand what you can and can't claim for and what you
need to keep in terms of receipts to complete the claims