FAQs
General
How do tax rates work?
Tax rates are divided into two categories – Residents tax rates and Non-residents
tax rates. Non – residents pay tax on every dollar of taxable income as declared
on their tax return but do not pay Medicare surcharge. Residents have to declare
all income earned in and out of Australia. A tax free threshold of $6000 is available
to them and a resident may be entitled to claim some tax offsets. Subjected to their
income, a resident may also have to pay the Medicare levy and Medicare levy surcharge.
How can I reduce my tax bill?
A common approach in Australia that people adopt to reduce their tax bill is known
as ‘Salary Sacrificing’. It is an arrangement between an employer and an employee,
whereby the employee agrees to forgo future entitlement to salary or wages in return
for the employer providing them with benefits of a similar value.
How do I apply for a tax file one?
Tax File Numbers are issued by the ATO and are used for the identification of tax
records. In order to obtain a TFN you must provide evidence of your identity to
the Tax Office. Application forms are available from the Tax Office or alternatively
you may download a copy of the application form from the ATOs
website. The completed form must then be returned to the ATO together with
original proof of identity documents. After a careful examination of your documents,
they will be returned to you and your tax file number will be issued within 28 days.
When should I complete my tax return?
It is important that your tax return is lodged before October 31st. If you are leaving
Australia for holiday purposes and won't be back until after the lodgement date,
contact the ATO or your tax agent to apply for an extension of time.
What is the difference between Medicare levy and Medicare levy surcharge?
Medicare is the scheme that provides Australian residents with access to health
care. To fund this scheme, resident taxpayers are subject to a Medicare levy. Resident
individuals are liable to pay a Medicare levy based on the amount of their taxable
income. The Medicare levy rate for the 2008/09 income year is 1.5% of taxable income.
No Medicare levy is payable where a person’s taxable income does not exceed a certain
threshold amount. For 2008/09 the threshold amount for individuals other than certain
pensioners is $17 794. Where the taxable income for 2008/09 is more than $17 794
but does not exceed $20 934, the levy is shaded in at the rate of 10% of the excess
over $17 794.
Medicare levy surcharge, on the other hand, is in addition to the Medicare levy.
Individuals and families on incomes above the Medicare levy surcharge thresholds,
who do not have private patient hospital cover pay Medicare levy surcharge for any
period during 2008/09 that they did not have this cover. The Medicare levy surcharge
is calculated at the rate of 1% of your taxable income.
Can I get an extension to pay my tax?
An extension on the payment of tax may be provided by the ATO, provided that you
had legitimate reasons that restricted you from paying tax in the first place.
What is a work related expense?
You are able to claim deductions for work-related expenses you incurred while performing
your job. You incur a work-related expense when:
- you receive a bill or invoice for an expense that you are liable for and must pay
- you do not receive a bill or invoice but you are charged and you pay for it
What is your Fee Policy?
We are here to help you in every way we can. We are dedicated to providing you with
high quality service at a reasonable cost. An appropriate amount of fee of will
be requested prior to the lodgement of your tax return. Alternatively, you can choose
our “Fee from Refund†option at no extra cost.
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Individuals
What happens to my tax if I have two jobs?
As an Australian resident for taxation purposes, the first $6000 of your yearly
income is not taxed. You are entitled to claim the tax-free threshold from one payer
only. If you have more than one payer at the same time, you should not claim the
tax-free threshold from the second payer as it is against the law to do so and may
lead you to incur a tax debt at the end of the financial year.
Do you still need to lodge a return if your income is less than the tax-free threshold?
The answer is YES, you do need to lodge a return even though your income is below
the tax free threshold. The reason behind this is that even though your income is
below the tax free threshold, you may have had tax withheld from those earnings
and the only way to get a refund of that tax is through the lodgement of the tax
return.
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Business
What does input tax mean?
Input tax refers to the fact that GST is paid on purchases but is not passed onto
the consumer and a refund cannot be claimed from the ATO.
Do all businesses charge GST?
No. For businesses registered with ATO, where their total revenue is over $75 000
per annum are required to be registered for GST. However, it is optional for businesses
to register for GST where their total revenue is less than $75 000 per annum. In
saying that, there are certain occupations that are obliged by law to be registered
for GST, for example, taxi drivers. It is also important to note that certain health
professions are exempt from GST purposes.
What are the consequences if I am not issued with an ABN?
You must have an ABN in order to be registered for GST. If you are not registered
for GST, your entitlements to charge GST and claim refunds for GST paid are lost.
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SMSF (Self Managed Super Fund)
Who is eligible for SMSF?
Almost everyone can have a self managed super fund. You must be able to make contributions
to your super or should already have money in superannuation.
Is there a requirement for minimum balance?
Although there is no minimum balance requirement, the ATO advises that a minimum
of $100 000 contribution be made to your super due to the costs involved. Therefore,
SMSF is not a very cost-effective method unless substantial contributions are being
made to the superannuation.
What are the advantages of SMSF?
- You have control over which assets your fund invests in
- You have a wide range of investments available to you
- You’re in a much better position to reduce the tax rate
- There may be very little or no ongoing investment management fees
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Tax Rates (Residents)
Tax Rates 2010-11
| Taxable Income |
Tax on this Income |
| $0 - $6,000 |
Nil |
| $6,001 - $37,000 |
15c for each $1 over $6,000 |
| $37,001 - $80,000 |
$4,650 plus 30c for each $1 over $37,000 |
| $80,001 - $180,000 |
$17,550 plus 37c for each $1 over $80,000 |
| $180,001 and Over |
$54,550 plus 45c for each $1 over $180,000 |
Tax Rates 2011-12
The following rates for 2011-12 apply from 1 July 2011
| Taxable Income |
Tax on this Income |
| $0 - $6,000 |
Nil |
| $6,001 - $37,000 |
15c for each $1 over $6,000 |
| $37,001 - $80,000 |
$4,650 plus 30c for each $1 over $37,000 |
| $80,001 - $180,000 |
$17,550 plus 37c for each $1 over $80,000 |
| $180,001 and Over |
$54,550 plus 45c for each $1 over $180,000 |
Tax Rates 2012-13
The following rates for 2012-13 apply from 1 July 2012
| Taxable Income |
Tax on this Income |
|
$0 - $18,200
|
Nil
|
|
$18,201 - $37,000
|
19c for each $1 over $18,200
|
|
$37,001 - $80,000
|
$3,572 plus 32.5c for each $1 over $37,000
|
|
$80,001 - $180,000
|
$17,547 plus 37c for each $1 over $80,000
|
|
$180,001 and Over
|
$54,547 plus 45c for each $1 over $180,000
|
Note: The above rates do not include the Medicare levy of 1.5%
What is Medicare Levy?
Medicare is the scheme that gives Australian residents access to health care. To
help fund the scheme, resident taxpayers are subject to a Medicare levy, which is
calculated at the rate of 1.5% of your taxable income.
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Tax Rates (Non-Residents)
If you are a non-resident for the full year, the following rates apply:
Tax Rates 2010-11
|
Taxable Income
|
Tax on this Income
|
|
$0 - $37,000
|
29c for each $1
|
|
$37,001 – $80,000
|
$10,730 plus 30c for each $1 over $37,000
|
|
$80,001 - $180,000
|
$23,630 plus 37c for each $1 over $80,000
|
|
$180,001 and Over
|
$60,630 plus 45c for each $1 over $180,000
|
Note: Non-residents are not required to pay the Medicare levy.
Tax Rates 2011-12
|
Taxable Income
|
Tax on this Income
|
|
$0 - $37,000
|
29c for each $1
|
|
$37,001 – $80,000
|
$10,730 plus 30c for each $1 over $37,000
|
|
$80,001 - $180,000
|
$23,630 plus 37c for each $1 over $80,000
|
|
$180,001 and Over
|
$60,630 plus 45c for each $1 over $180,000
|
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Flood Levy
|
Taxable Income
|
Flood levy on this Income
|
|
$0 - $50,000
|
Nil
|
|
$50,001 – $100,000
|
Half a cent for each $1 over $50,000
|
|
$100,000 and Over
|
$250 plus 1c for each $1 over $100,000
|
Note: The flood levy only applies to taxable income derived from 1 July 2011 to 30 June 2012.
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