Jesse Rivest's Blog
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Monday, July 03, 2006
Get your Tax File Number (TFN), and open a bank account, immediately when you enter the country. Do not wait. Do it now. You have to be in Australia... do it now if you are in Australia!
The Big Question that appears on Australian Taxation Office (ATO) forms when you start a new job: are you an Australian resident for tax purposes? The answer is NO. If you think the answer is YES, then please read here before you completely commit to YES. The difference between NO and YES is huge in terms of tax rates and withheld tax. Everybody will tell you to say YES, and The Refunder will get you lots of your tax back if you claim you were a resident... but essentially, you may be lying to the Australian government. You decide!
When leaving an employment situation (i.e. a job), get the following
- The Australian Business Number (ABN) of the employer who pays you
- The full contact details for the employer
- an official payment summary that outlines your TFN, total income, total superannuation witheld, and total tax withheld. If they won't prepare one for you at that time, you will need to contact them near tax time to get one.
Tax time in Australia is July to October.If you are skilled at particular trades, and plan to stay a while in Australia, then apply for your own ABN and buy an invoice/receipt book so you can give tax receipts. Be a contractor! Keep your business expense receipts, and your income record, and expect to hire an accountant to lodge your tax return.
Note that coffee shops, restaurants, and bars probably won't hire a contractor, they want you to be an employee. It depends on how talented you are, I suppose! In my opinion, being a contractor, rather than an employee, is much preferred - nothing should be withheld, and you don't have to charge GST unless you are earning over 50 or 60 thousand dollars. It's simple, really!
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