If you’re an international student who is studying in Australia for more than 6 months, you may be considered an Australian resident for tax purposes and might have to pay taxes like a normal resident, according to government policy.
It can feel overwhelming but don’t worry – doing your taxes in Australia isn’t as hard as it sounds.
This guide will help you understand everything you need to know about filing taxes as an international student like who needs to file, how to do it, important deadlines, and tips to make it easier.
What is the Australian Tax System? Tax Filing Guide for International Students
In Australia, the more money you earn, the more tax you have to pay, which is called as progressive tax system. The tax rate increases with your income.
The Australian Taxation Office (ATO) is the government agency that collects these taxes and makes sure everyone is following the tax laws.
Are International Students Required to File a Tax Return?
Yes, if you’re making any money in Australia during the financial year, then you need to report it to the government by filing a tax return.
You must file a tax return as an international student if:
- You’re making money while studying from doing a part-time job, internship, or a scholarship.
- A part of your salary has been taken out by your employer to pay to the government as tax.
- You want to claim a tax refund.
If you didn’t make any money during the year, you might not need to do a tax return. But you should still inform the ATO by sending a form called Non-Lodgment Advice.
Resident vs Non-Resident for Tax Purposes
One of the most confusing parts of Australian tax filing for international students is that, if you’re a resident or not. Because, in Australia, your tax residency is different from your visa type.
Even if you’re living there for study purposes, you might still be considered as a permanent resident for tax purposes, especially those who are studying in Australia for more than six months.
This status allows you to:
- Access tax-free threshold, it means you don’t have to pay tax on the first $18,200 you earn.
- Pay less tax than people who are not residents.
- Claim reduction in your tax and get some discounts on your tax (tax offset).
If you’re not sure about your residency status for tax purposes, the ATO has an online tool called the Tax Residency Tool that can help you figure it out easily.
What Do You Need Before Filing a Tax Return?
Before you start doing your tax return, make sure you have the following:
1. Tax File Number (TFN)
You need a TFN (Tax File Number) to work and do your taxes in Australia. If you don’t have one, you can apply for it on the ATO (Australian Taxation Office) website.
2. Income statement
These are the documents from your employer that show how much money you made and how much tax was taken out of your pay.
3. Bank Statements
If you got extra money from a bank like interest, you need to include that information in your tax return.
4. Scholarship or Stipend Records
Some scholarships count as income, so you might need to pay tax on them and you need to present that record too.
5. Receipts for Deduction
If you want to get money back for work-related costs, you need to keep your receipts as proof.
6. MyGov Account
This is the website or app you use to connect with the ATO and do your tax returns online.
How to File Your Tax Return in Australia?
When you’re studying in Australia and you want to file tax returns, then you can use one of these three methods.
1. Online via MyGov
Most international students use this method and here’s how:
- Link your government account to the ATO (Australian Taxation Office).
- Then use the “myTax” system to complete your returns.
- Most of your income details from your employer like bank details are pre filled.
- You must submit your returns before the deadline.
2. Through a Registered Tax Agent
If your taxes are hard to understand or you want help, you can get a registered tax agent to do it for you and they can:
- Help you ask for the right tax refunds for your work or other expenses.
- Make sure everything is accurate.
- Send or lodge your tax return to the ATO on your behalf.
3. Paper Tax Return
This is the least used method, because it takes more time. You can ask the ATO to send you a paper form, fill it in, and mail it back.
Important Dates to Remember
- 1st July: The financial year finishes, and you can start getting ready to do your tax return process.
- 31 October: The last date to send your tax return if you are doing it yourself.
- Later than 31 October: If you use a registered tax agent, you might get extra time to lodge your tax return.
Make sure not to miss the deadline, because this can lead to unnecessary penalties and you have to pay extra money for that.
What Deductions Can International Students Claim?
You might be able to get money back for some work-related costs, like:
- Uniform and work clothing.
- Tools and equipment required for your job.
- Travel you do for work, but not your regular trip to and from your normal workplace.
- Union fees and subscriptions to professional organizations.
You cannot claim:
- The cost of your visa.
- Course fees unless the study is related to your job and follows certain rules.
- Living expenses.
Keep the receipts for the things you want to claim in future, in case ATO asks for the proof. If you can’t show receipts, you can’t claim tax returns.
What Happens If You Don’t Lodge a Tax Return
If you don’t lodge a tax return when required, you may:
- Be charged a penalty by the ATO.
- Miss out on exciting tax returns which are really profitable sometimes.
- Most importantly you may face problems with your visa and residency application for the future.
So, it’s really important to lodge a tax return in time, even if you earn a little.
Conclusion
Hence, understanding how to file a tax in Australia is important for you as an international student. It might seem hard at first, but following the steps above will make it much easier.
Whether you earn a little or nothing, doing your tax return can help you follow the law and might even get you some extra money back.
Know someone who needs a tax filing guide in Australia? Share it with them! And drop your thoughts in the comment section. We’d love to hear from you and keep the conversation going!
FAQs
Do international students need to file a tax return in Australia?
Yes, if you earn any income in Australia, like from a part-time job, or getting a scholarship, you must file a tax return.
What is the tax-free threshold?
It is the amount you can earn before paying any tax and that amount is $18,200.
How do I know if I am a resident for tax purposes?
If you stay in Australia for more than 6 months, you’re basically considered a resident for tax purposes, even if you’re on a student visa.
What do I need to file my tax return?
You need a Tax File Number (TFN), your income details like pay slips or payment summaries, and receipts for any deduction you want to claim.
Can I get help with my tax returns?
Yes, you can use a registered tax agent to do your tax related work on your behalf or simply use the ATO’s online services for help.