The international student's guide to lodging a tax return in Australia

Image by @kellysikkema

Do international students in Australia pay tax? 

The duration of your student visa determines whether you are classed as an Australian resident for tax purposes or a non-Australian resident for tax purposes.

You will be considered an Australian resident for tax purposes by the ATO (Australian Tax Office) if you meet the below criteria:

• You hold a student visa that lasts for more than six months
• Your course is shorter than six months but you spend more than 183 days in Australia with a visa which allows you to work during the financial year (July 1 - June 30)  

If you are a temporary resident, you need to declare income you make in Australia plus any income you earn from employment or services performed overseas during your temporary residency. 

Please note: If you are on a Working Holiday Visa or were on a Working Holiday Visa between July 2020 to June 2021, you will be taxed differently. If you are on the Temporary Activity visa (subclass 408) due to the Covid-19 pandemic then you will also be taxed differently. You will need to contact ATO for further details. 

Why do I need to pay my taxes in Australia?

Most international students need to lodge a tax return every financial year. This will determine if you have paid enough or too much tax, whether or not you need to pay the Medicare levy and if you are eligible to receive any tax offsets.

If you have paid more tax than necessary, you will be given a refund. If you haven’t paid enough tax, then you will receive a tax bill.  

How much tax do international students have to pay in Australia?

If your taxable income sits at $18,200 or below, you will be entitled to a tax free threshold and won’t have to pay any tax for the year ending on June 30.

If you are an Australian resident for tax purposes then you won’t pay tax on the first $18,200 you earn as salary, wages and subcontractor’s income. After this, your tax will start at 19% but will increase as your income, earned either as salary, wages or subcontractor’s fees, increases.     

You are also entitled to the benefits of the tax system such as lower tax rates than a foreign resident, tax offsets and the tax-free threshold. 

Remember: If you earned $18,200 or less and your employer deducted income tax, then you are entitled to apply for a refund.

Image by @myleon

What tax expenses can I claim?

You can reduce your total taxable income through deductions which are directly related to earning an income.

There are two types of expenses that international students can claim: personal and work-related deductions. In order to do so, you must be able to provide relevant receipts, invoices and bank statements.

Below, find a list of expenses that can be deducted:

• Home office expenses such as computers, printers, heating, lighting etc.
• Work-related subscriptions
• Vehicle and travel expenses between work sites
• Work-related phone and internet expenses

If you are unsure whether or not you are eligible to claim certain expenses, we recommend seeking legal advice or checking ATO regulations.

Do I need an accountant to do my taxes in Australia? 

No, you can lodge your tax return using ATO’s myTax system but it is highly recommended that you seek guidance. 

Although you will need to pay a small fee, an account will ensure that you include all of the deductions that you are eligible for and they will double check the accuracy of your returns. You can even claim the cost of your tax agent in the next financial year. 

If you need further advice, please don’t hesitate to get in touch with our expert team.

What do I need to file my tax return in Australia?  

International students need a tax file number (TFN) in order to lodge an income tax return. A (TFN) is your personal reference number. You can apply for your TFN free of charge through the Australian Tax Office and the process should only take around 20 minutes. You will need to provide your personal details, your passport or travel document number and a postal address in Australia.

You can find further information on applying for your TFN on our website.

What if I'm self-employed? 

If you’re freelance or provide your own services, then you will also need to apply for an Australian business number (ABN). You can apply on the Australian Tax Office website or can lodge a form by mail. 

You will be asked to provide details about your business, activities and identity. More can be found on ATO's website.

What do I need to do before beginning my tax return?

If your employer is paying your wages through Single Touch Payroll (STP) then you can access your income statement information on ATO via myGov. If not, your employer should give you a payment summary.

If you leave a job during the financial year, then make sure to ask your employer for your payment summary when you leave. If they have been reporting your tax and super information through STP then they will need to complete a finalisation declaration. 

Image by @charlesdeluvio

I'm returning to my home country, do I still need to lodge a tax return?

If you worked during your time in Australia then you will most likely need to lodge an Australian tax return after June 30. You can do so online after leaving the country.

If you are leaving permanently, you may be eligible to lodge your tax return early. In this care, you must lodge a paper return which is likely to take longer to process.

How do I claim my super?

Superannuation, commonly referred to as ‘super’, is a way of saving money for retirement in Australia. If you are working a certain number of hours for your employer, you may qualify for a super contribution from your workplace.

Whilst you are living in Australia, your superannuation contributions must stay in your fund. 
​
You may be able to claim your super after you leave the country if you meet the below requirements:

• You were in Australia on an eligible temporary resident visa 
• Your employer made contributions to your super while you were living in Australia
• You have left Australia and your temporary visa has expired. ATO will hold your unclaimed super until you claim it. 

For more information on your superannuation fund, head over to our expert blog.

If you have any questions about your tax return, please don’t hesitate to get in touch with the Study Online Australia team.