Australia's tax system is administered by the Australian Taxation Office (ATO). All individuals earning income in Australia are subject to Australian tax law, regardless of their citizenship or migration status.
The Tax File Number is a unique identifier issued by the ATO. Everyone earning income in Australia needs a TFN. Without a TFN, employers are required to withhold tax at the highest marginal rate (currently 47% including the Medicare levy).
TFN applications are submitted through the ATO website. Australian residents typically receive their TFN within 28 days.Tax residency in Australia is determined by the ATO based on domicile, habitual abode, and residency tests not by visa status. A person who moves to Australia with the intention of staying is generally a tax resident from the date of arrival.
| Taxable income | Tax on this income |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16% over $18,200 |
| $45,001 – $135,000 | $4,288 + 30% over $45,000 |
| $135,001 – $190,000 | $31,288 + 37% over $135,000 |
| $190,001+ | $51,638 + 45% over $190,000 |
Source: https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
| Taxable income | Tax on this income |
| $0 – $135,000 | 30% of income |
| $135,001 – $190,000 | $40,500 + 37% over $135,000 |
| $190,001+ | $60,850 + 45% over $190,000 |
Source: https://www.ato.gov.au/tax-rates-and-codes/tax-rates-foreign-residents
A Medicare levy of 2% applies on top of income tax for residents eligible for Medicare. A Medicare Levy Surcharge of 1–1.5% applies to higher-income earners who do not hold private hospital insurance.Non-residents are taxed at a flat rate of 32.5% on all Australian-source income up to AUD 120,000, with no tax-free threshold.
Superannuation is Australia's compulsory retirement savings system. Employers are required to contribute 11.5% of an employee's ordinary time earnings to a superannuation fund in 2024. The rate increases to 12% from 1 July 2025.
Superannuation contributions are taxed at a concessional rate of 15% rather than the individual's marginal rate. Funds accumulate tax-advantaged until retirement.Indian migrants who leave Australia before retirement can access their superannuation as a Departing Australia Superannuation Payment (DASP) after their visa expires. DASP is taxed at 35% for taxable components (or 65% for working holiday makers). For most skilled migrants who plan to stay in Australia long term, superannuation accumulates as regular retirement savings.Australia's financial (tax) year runs from 1 July to 30 June. Tax returns for the year must be submitted to the ATO by 31 October, or by 15 May of the following year if lodged through a registered tax agent.
Individuals receive an Income Statement in myGov from each employer showing gross income and tax withheld. Most employees submit their tax return through myTax (via the ATO's myGov portal) or through a tax agent. Filing online through myGov is free and straightforward for those with salary income only. Tax refunds common in the first year if you start mid-year are processed within two to four weeks of lodgement.Australian tax residents can claim work-related expenses as deductions against taxable income. Common deductions include:
GST is a 10% value-added tax on most goods and services sold in Australia. It is embedded in prices as displayed and is not added separately at the point of sale. The price you see on a shelf or menu is the price you pay.
Businesses and self-employed individuals with annual turnover above AUD 75,000 must register for GST, collect it from customers, and lodge quarterly Business Activity Statements (BAS) with the ATO.Self-employed individuals working as sole traders or contractors must register for an Australian Business Number (ABN) through the Australian Business Register. They are responsible for:
India and Australia have a Double Taxation Avoidance Agreement (DTAA), signed in 1991. Under this treaty, income earned in one country by a resident of the other is taxed in only one jurisdiction, preventing double taxation.
For Indian migrants who become Australian tax residents, their global income is taxable in Australia from the date of becoming a resident. India-sourced income rental income from property in India, dividends from Indian shares, capital gains from the sale of Indian assets must be reported in Australian tax returns. Credit is given for taxes paid in India under DTAA provisions, preventing double taxation but not eliminating Australian tax liability entirely.Indian mutual fund investments are treated as foreign investments for Australian tax purposes. Capital gains from selling units in Indian mutual funds are assessable in Australia. The Foreign Income Tax Offset (FITO) system within the Australian tax framework manages these overlapping obligations.
