What to do when you are new to the Tax system in Australia?
Many of our clients ask us why we need to pay tax. In this blog, we have taken upon this question and brought the answer from ATO.
Let us first understand why we pay tax, according to the guidelines issued by ATO:
- Why we pay tax
- How much tax you will pay
- Before you start working
- When you start working
- Lodging a tax return
- Complete and lodge your tax return
Why paying tax is necessary?
According to the ATO, Tax is the money people and businesses may have to pay to the Australian Government. Australian Government spent that money to provide services, including:
- roads and railways
- social security and other payments from Centrelink – Services Australia.
The government of Australia is liable to provide a good health system, quality education, and a variety of community facilities (for example, parks and playgrounds) to its citizens. These facilities are supported through tax collections.
How much tax one may have to pay in Australia?
Well, the amount of tax you pay depends on which category you fall into. The ATO has defined these categories as underlined:
- If you are an Australian resident for tax purposes.
- how much income you earn?
- whether you have more than one job.
- whether you have a tax file number (TFN) – this is a personal reference number that you should tell your employer after you start working for them.
If you start working before you have a TFN, then you have 28 days to get one and give it to your employer. If you don’t, your employer must take tax from your pay at the highest rate.
- Individual income tax rates
For further information contact KPG Taxation, Derrimut.
Office Address: Office 107, Level 1/21 Elgar Road, Derrimut VIC 3030, Australia
Call 03 9706 9313, or book online at www.kpgtacation.com.au and your tax agent will be in touch to help.