Starting a job and tax
Find out what you need to know about tax when starting work.
The Australia Taxation Office (ATO) is the principal revenue collection agency of the Australian government. If you have not paid income tax before, or you are new to the Australian tax system, the ATO website provides useful information on your rights and obligations.
Get a tax file number (TFN)
Before you start work, or soon after, your employer will ask you for your tax file number (TFN) and bank account details. You will also be asked to complete a TFN declaration which your employer uses to work out how much tax to withhold from your pay. Any delay in providing this information may affect your pay.
Apply for a TFN:
Working as an employee
As an employee, you are working in another person's business. Find out more about your rights and obligations as an employee from the ATO website.
Working as a contractor
As a contractor, you are self-employed and you're running your own business. You can be an individual (sole trader), or working in your own company, partnership, or trust.
As a sole trader some employers may ask you for an Australian Business Number (ABN) and work as a sole trader. This means your employer will ask you to invoice them for the work that you do and you will be responsible for paying your own tax.
Find out more about your rights and obligations as a contractor from the ATO website.
These resources can assist you if you work as a sole trader:
Lodging a tax return
If you are working or have earned an income during the financial year, you may be required to lodge an income tax return to the ATO.
If you are an Australian resident, the first $18,200 you earn is tax-free. This is called the tax-free threshold. Most international students will be considered Australian residents for taxation purposes. Visit ‘Work out your tax residency’ on the ATO website for more information.
International students do not have to pay the Medicare levy and should apply for a Medicare Entitlement Statement to claim the exemption. International students cannot claim a private health insurance rebate for Overseas Student Health Cover. However, if you have purchased additional extras cover, you may be eligible to claim a rebate. Visit the ATO website for more information.
If you earn less than $18,200 in a financial year, you may not need to pay income tax. If you earned more than $18,200, you may only need to pay income tax on your earnings over $18,200. If you’re not sure if you have to pay tax this year the ATO’s ‘Do I need to lodge a tax return?’ tool can help you work it out or you can speak to a Student Support Advisor at RMIT Connect for assistance.
If you do need to lodge an income tax return it is important that you only claim deductions to which you are entitled. This includes deductions for self-education expenses. You can only claim a deduction for self-education expenses when your course of study is directly connected to your current employment.
These resources from the ATO can assist you to work out eligible tax deductions: