30 Jun Working on My VISA
Travellers coming to Australia for travel, work, study, or migration need a visa appropriate for their reason for travel. Visas include different conditions on a person’s stay in Australia including working and engagement with the tax and superannuation systems.
The Australian Taxation Office (ATO) data matches with the Department of Home Affairs on active and newly granted visas. The data is matched against ATO records to ensure visa holders, visa sponsors, and migration agents are meeting their tax and superannuation obligations.
The visa data-matching program allows the ATO to identify and address taxation risks in the population of visa holders, visa sponsors, and migration agents including, among other things:
- Helping process tax file number (TFN) registration for visa holders entering the country including tailored advice for TFN applicants’ employers,
- Ensuring appropriate taxation treatment is being applied by employers of visa holders including registration, lodgement, reporting and payment obligations for pay as you go withholding (PAYG), fringe benefits tax, and super guarantee,
- Determining if applicants departing Australia are entitled to access superannuation,
- Identifying taxpayers who incorrectly claim Australian residency in their income tax returns for financial gain,
- Identifying incorrect tax refunds through pre-issue compliance work,
- Identifying and cancelling Australian business numbers (ABNs) obtained and used inappropriately by visa holders as contractors, when they should be classified as employees.
If you plan to work in Australia, you need a tax file number (TFN). Your TFN is your personal reference number in our tax system. You can apply for a TFN online once you have your work visa. It is free to get a TFN.
Keep your TFN safe. You keep the same TFN your whole life, even if you change your name or move interstate or overseas. Don’t let anyone else use your TFN – not even friends or relatives. Never give your TFN out in a job application or over the internet. You should only give your TFN to your employer when you start working for them.
When you start work, you give your employer a tax file number declaration. This helps the employer work out how much tax to withhold from your pay.
You should tell your employer if your visa is a subclass 417 – Working Holiday, or subclass 462 – Work and Holiday, to ensure you are taxed at the correct rate.
The first $45,000 of your working holiday maker income is taxed at 15%. All other income is taxed according to your residency status.
If your income includes lump sum or employment termination payments and is:
- Less than or equal to $45,000, you won’t receive an ’employment termination payment or unused leave tax offset’ on those payments.
- More than $45,000, the amount will be taxed according to your residency status.
Your employer is required to be registered with the ATO as an employer of working holiday makers, you do not have to register yourself. If your employer has not registered themselves, they must withhold tax from you at 32.5% for the first $90,000 you earn.
You can ask your employer about this and they should tell you. If they don’t, your first pay will tell you as there will be more tax taken out of your wages than you expect.
Subclass visa 403 has two types, called stream 60 and stream 69.
The 403 – Seasonal Worker Program (SWP) is stream 60. This is a temporary visa that is valid for up to 9 months.
- Continue to be employed by your sponsor,
- Only do the work in the industry covered by the visa,
- Not work for yourself or anyone other than the sponsor,
- Comply with all visa conditions and Australian laws.
If you are in the SWP, your employer must withhold tax at a flat rate of 15% on all payments made to you. Workers under the SWP are non-residents of Australia for tax purposes. You may become a resident for tax purposes if you stay in Australia after working on the program.
***Seasonal workers are not required to lodge tax returns unless you have other Australian or foreign income outside of the program. You do not declare the income earned and cannot claim any work-related deductions. If seasonal workers do lodge a return, you should not include your income from the SWP in your tax returns. Only other Australian or foreign income is declared.
The 403 – Pacific Labour Scheme (PLS) is stream 69. This is a temporary visa that is valid for up to 3 years. This scheme covers primarily hospitality, tourism, aged and disability care, agriculture, forestry and fishing. The obligations imposed are the same as stream 60.
PLS workers are considered to be residents for tax purposes because you can work in Australia between a minimum of one year and up to three years or longer. If you are a PLS worker, your employer must withhold tax at resident rates using regular tax tables. PLS workers are protected by Australian workplace laws, in the same way as Australian workers.
PLS workers are required to lodge tax returns and must include other income earned in Australia and outside of Australia.
You may also be on a subclass 408 visa, which is a bridging visa. These can be issued when a person is on a 403 and is seeking to stay in Australia. The conditions of a 408 are the same as the type (stream) of 403 you had.
Your employer also has to pay superannuation for you if you are an ‘eligible employee’. This is someone who is 18 years of age or older and is paid $450 or more, before tax, in a month. It doesn’t matter if you are full time, part time, or casual.
When you are going home permanently, you can ask for your superannuation to be paid back to you. You must have an active Australian bank account to do this.
Everyone working in Australia has the same workplace rights under the National Employment Standards (NES). The national minimum wage and NES make up the minimum employment entitlements that must be provided to all employees.
Should you require any additional assistance please don’t hesitate to contact us.