TAX / TFN and Tax Refunds
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Do I need a Tax file Number / TFN if I am only looking for backpacker jobs and traveller jobs?
Like any country the Australian government want their share of your hard earned cash in the form of tax from your wages. Unfortunately this is the same even if you are only looking for short term backpacker jobs.
What is a tax file number / TFN?
A Tax file number (TFN) is a unique number issued by the Australian Taxation office (ATO) that you give to your employer. Your employer will give you a tax declaration form when you start work for you to fill out and you will need to put the number on the form. They will then pay tax to the tax office on your behalf.
What happens if I do not have a TFN and I start work?
If you do not have a TFN before you start work you normally get approximately 28 days in order to provide it to your employer. If you fail to provide it after this time the employer is legally obliged to tax you at a rate of 50%! You can start work before you have received it but be aware it is your responsibility to provide it to your employer.
How do I get a tax file number / TFN?
In order to be issued a tax file number (TFN) you will need to be in Australia and have a valid visa with working rights (e.g a working holiday visa). The process is pretty straight forward and you can apply online by by going to the ATO website and completing the form online. Applying online via the website is the FASTEST way to receive your TFN and normally takes about 10 days but can take up to 28 days!
When should I apply for a Tax File Number?
In short as soon as possible after you arrive. You must be in / have entered Australia when you apply otherwise the system will not allow you to apply. You will need you passport number handy and other personal details like your date of birth and overseas address. You will also need an Australian address for them to send it to. The other option if you do not have a fixed Australian address is to have it sent to the hostel / backpackers you are staying in. This can be a pain as may get lost or you may move hostels.
How much tax do I pay?
You are enjoying the good life in Australia and unlike the song "the best things are life are free" the tax office would like its share of your reddies. As you are on a working holiday visa you are classed as non resident for tax purposes. Hence you will pay 29c for every dollar you earn up to $35,000 and you will NOT be entitled to any tax free threshold. For the big earners, if you earn over $35,000, 30c for every dollar over. Hence every dollar of your hard earned cash will give you 70c in your pocket.
Can I get my tax refunded?
If you have been in Australia for 6 months or intend to be here for 6 months, have worked and paid tax you may be eligible for a tax refund. Check out our Tax refund page for more info.
Should I work for cash?
Some employers offer to pay backpackers in cash (without deducting tax) which may seem like a great idea but most will pay you a wage that is well below the minimum award rate of pay for your industry. An example, that is not uncommon, would be working in a cafe where they give you $10 cash plus tips. If you were on the payroll your minimum legal award rate that the employer must pay would be around $16 an hour plus tips and you would receive your 9% super contribution as well! Chances are also that if you have an accident at work you would not be able to claim against your employers liability insurance as you are not registered as an employee. In this case you would be better working for another employer, receiving the minimum award rate of pay and your superannuation as you can claim back your superannuation when you leave Australia. Note it is your responsibility to ensure you have paid the correct rate of tax at the end of the tax year which runs 1st July to 30th June each year.
Learn about Superannuation and Bank Accounts or Backpacker Tax Refunds
Disclaimer: Please note the above information is intended for a guide only. Tax / superannuation information changes regularly and we are not Tax agents so for the most up to date advice please contact the Australian Taxation office.