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)
The tax rates have a 5 tier system as opposed to the 3 tier system used in the UK. For the term 2015-16 are as follows:
|Taxable Income||Tax On This Income|
|0 to $18,200||Nil|
|$18,201 to $37,000||19c for each $1 over $18,200|
|$37,001 to $80,000||$3,572 plus 32.5c for each $1 over $37,000|
|$80,001 to $180,000||$17,547 plus 37c for each $1 over $80,000|
|$180,001 and over||$54,547 plus 47c for each $1 over $180,000|
So if you earned $40,000 in the tax year, your tax owed would be $3,571.81 + 32.5c * $3,000 = $4,546.81
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 extraMedicare 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!
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!
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
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