Worked in Australia? Check out our top 7 tips for claiming your tax back!
1. Work out your tax residency
One of the biggest factors affecting how you’re taxed in Australia and the amount of your refund is whether you’re a non-resident or resident for tax purposes. All temporary visa holders entering Australia should pay the non-resident rate of tax during their first 6 months to comply with Australian tax law. Although it’s a much higher rate of tax than the resident rate, it’s important to ensure you’re not left with a tax liability when you depart Australia.
Free Australia Working Holiday Guide
2. Income tax refunds
Good news! If you become an Australian resident for tax purposes, you may be entitled to a refund of the tax you paid at the higher rate. There are a number of factors that determine if you’re an Australian resident for tax purposes, including how long you’ve been in the country and your behavior while in Australia.
For example, if you’re visiting Australia for more than six months, live in the same place and establish ties with the local community, then you’re likely to be considered an Australian resident for tax purposes.
Sometimes it can be difficult to know if you’re a resident for tax purposes or not, so employing a tax agent like Taxback.com can help you avoid any liabilities and maximise any refunds you’re entitled to.
3. Claim your Superannuation (Read the update to superannuation: 2017)
Even If you’re not eligible for an income tax refund due to the length of your stay or nature of your visa, you should still be eligible to claim back superannuation.
Superannuation is a percentage of your salary put aside for the purposes of a retirement fund, but if you’re not staying in Australia until retirement you’re entitled to a refund!
You can apply for your superannuation as soon as you depart Australia permanently and your visa has expired. Taxback.com can even get your visa cancelled for you to help speed up the process.
The average superannuation refund is $3380
If you earn $450pm or more in Australia, your superannuation is paid by your employer into a fund on your behalf. The average superannuation refund with Taxback.com is around $3,380, so even if you can’t claim back tax you paid as a foreign resident you could still walk away with a huge sum.
4. Medicare levy exemption
The Medicare levy is the universal health scheme for Australians and is partly funded by taxpayers who pay a levy of 2.0% of their taxable income. It guarantees Australians and some other nationalities (Britons and Italians) access to healthcare at little or no cost.
Some people are exempt from paying the levy, including some foreign citizens, yet it’s still deducted from their wages. These people should apply for an exemption letter which will boost their refund.
You must earn more than $20,542 in the financial year to be eligible for a Medicare levy exemption and submit a Medicare Entitlement Statement separately to your tax return application. It might take about 10-12 business days longer to get your refund but it will be worth it!
5. Declare your bank interest
You must disclose any interest you earned from the bank on your annual tax return. The Australian Tax Office has visibility on taxpayers’ bank interest so not declaring it will simply further delay your refund.
The average tax refund Down Under is AU$2600
6. Claim your work expenses
Expenses are a great way to boost your tax refund or minimise any tax liability in Australia. Some expenses related to your occupation are tax deductible, so it really depends on what your job was in Australia.
To claim an expense:
- You must have paid for it yourself and weren’t reimbursed
- It was related to your job
- You must have a record or proof (with some exceptions)
Types of expenses
There are many different types of expenses you can claim, such as tools, equipment, and travel between work and home in some cases. Common items also include courses such as RSA, RCG, and white cards. All these items are deductible and can have a big impact on your tax return. Click here for a full list of deductibles.
There are some exceptions, however in most cases you should retain all your receipts for work expenses so you can have proof for the Australian Tax Office. At Taxback.com we can tell you what you need to submit as evidence.
7. Submitting Your Tax Return
You’re legally obliged to file an Australian tax return if you’ve paid tax of any kind during your stay, even on a working holiday visa or as a foreign resident.
The Australian financial year runs from the 1st July to the 30th June, and because you have to submit a tax return every year, you may have to submit more than one if you’re present for longer than one tax year.
If you’re a foreign resident, are no longer an Australian resident for tax purposes or no longer receive Australian-sourced income (i.e., you’ve left your job and aren’t due to receive any outstanding salary), you may able to send in a tax return early if you’re leaving Australia permanently.
If you don’t submit by 31st October, you could face a penalty and miss out on any refunds so don’t forget and get in touch today!
The average tax refund Down Under is AU$2600