Key Takeaways

  • Get a Tax File Number (TFN) immediately — without one you are taxed at the top marginal rate regardless of what you earn.
  • Superannuation is a compulsory employer contribution on top of your salary, paid into a retirement fund. It is real money and it is yours.
  • A salary quoted as a "package" includes super; a salary quoted as "base" or "plus super" does not. The same number can mean two different things.
  • Claim the tax-free threshold on one job only — claiming it on two leads to a bill at tax time.
  • Australia's tax year runs 1 July to 30 June, and most people lodge a return afterwards through myGov.

Get a TFN before anything else

A Tax File Number is your personal identifier with the Australian Taxation Office (ATO). You apply through the ATO, and international students and visa holders can generally apply online once they have arrived.

Without a TFN you are taxed at the highest marginal rate on every dollar, regardless of how little you earn. The money is recoverable when you lodge a return, but you are effectively lending it to the government interest-free for up to a year.

Your employer will give you a Tax File Number Declaration to complete when you start. This is where you provide your TFN and answer the tax-free threshold question below.

The tax-free threshold, and the trap

Australia does not tax the first portion of your annual income. On the declaration form you are asked whether you want to claim the tax-free threshold from this employer.

The rule is simple: claim it from one employer only.

If you hold two jobs and claim the threshold on both, each employer withholds as though it were your only income. Neither withholds enough, and you receive a tax bill when you lodge your return. This catches a very large number of students working two casual jobs.

Claim it from the job that pays you the most. If your income situation changes, you can submit a new declaration.

Superannuation, properly explained

This is the concept that most confuses people arriving from other systems.

Super is a compulsory contribution your employer pays on top of your wages into a retirement fund. It is not deducted from your salary — it is an additional amount, calculated as a percentage of your earnings, and the rate is set by legislation and has been rising in steps.

It is your money. It sits in a fund in your name, invested, until you reach preservation age.

You usually choose the fund. Your employer will offer a default, but you can nominate your own. If you never nominate one, contributions go into a stapled fund — one already linked to you from a previous job — which is a rule designed to stop people accumulating multiple accounts.

Multiple accounts cost you real money. Each fund charges fees and often insurance premiums. Someone with four accounts from four casual jobs is paying four sets of fees on a small balance. Consolidating through myGov takes minutes.

If you leave Australia permanently on a temporary visa, you may be able to claim your super back through the Departing Australia Superannuation Payment (DASP), though it is taxed on withdrawal. Worth knowing before you assume the money is gone.

Base versus package: the comparison trap

This single distinction changes what an offer is actually worth.

Wording What it means
"$X plus super" $X is your salary; super is paid on top
"$X base" Same — super sits on top
"$X package" or "total remuneration" Super is included inside $X

Two offers quoting the same number can differ by the full super percentage depending on which convention each uses. Ask which one applies before comparing anything, and ask in writing. It is a completely normal question and recruiters answer it without blinking.

Reading your first payslip

  • Gross pay matches your contracted rate for the period.
  • PAYG withholding is income tax withheld by your employer and sent to the ATO on your behalf.
  • Superannuation appears as an employer contribution — check it is actually being paid, and to the right fund.
  • Net pay is what reaches your account.
  • Leave balances — annual leave and personal (sick) leave — usually accrue visibly each period.

Check your super is actually being paid. Unpaid superannuation is a real and reasonably common problem, and it is far easier to raise in month one than to reconstruct a year later. Your fund's own app or myGov will show contributions arriving.

The tax year and lodging a return

Australia's financial year runs 1 July to 30 June.

After 30 June, your employer reports your income to the ATO through Single Touch Payroll, and it appears pre-filled in myGov. Most people lodge a return between July and the October deadline, and for a straightforward situation it takes well under an hour because most of it is already filled in.

You may get a refund, because PAYG withholding is an estimate and frequently over-withholds — particularly if you did not work the full year, which describes most graduates in their first year.

Deductions are for work-related expenses you paid for yourself and were not reimbursed for. Keep receipts. The ATO app has a tool for this and it is easier than reconstructing the year in July.

What else comes out of your pay

Beyond income tax, two deductions surprise people in their first year.

The Medicare levy is a percentage of taxable income funding the public health system, applied on top of income tax for most residents for tax purposes. There is a low-income reduction, and a separate Medicare Levy Surcharge applies to higher earners without private hospital cover - which is the point at which taking out basic private cover can cost less than the surcharge does.

HECS-HELP repayments, if you studied in Australia on a government loan, start automatically once your income passes a repayment threshold. They are withheld through your pay like tax, at a rate that rises with income. Two things matter: tell your employer you have a HELP debt on your declaration form so they withhold enough, and remember that the balance is indexed annually.

Working holiday visa holders are taxed differently. A separate rate schedule applies from the first dollar, and the ordinary tax-free threshold does not work the same way. If you are on a 417 or 462, check your own situation rather than assuming the standard rules apply.

Residency for tax, which is not visa status

This distinction causes a genuine amount of confusion, and it decides how you are taxed.

Tax residency is not the same as immigration status. You can hold a temporary visa and still be an Australian resident for tax purposes, and that is the usual outcome for someone studying or working here for an extended period.

Residents for tax purposes get the tax-free threshold, pay ordinary marginal rates, and declare worldwide income. Non-residents get no tax-free threshold and are taxed from the first dollar at a higher rate, but only on Australian-sourced income.

The ATO publishes a residency test, and it turns on facts like the length and pattern of your stay rather than on which visa you hold. If your situation is genuinely unclear - you arrived mid-year, or you split the year across two countries - it is worth one conversation with a tax agent, because getting it wrong in either direction is expensive.

Tax agent fees are themselves deductible in the following year, which makes a straightforward first-year return with a professional cheaper than it looks.

Mini checklist

  • unchecked: TFN applied for and provided to your employer
  • unchecked: Tax File Number Declaration completed
  • unchecked: Tax-free threshold claimed on one job only
  • unchecked: Super fund chosen, or the default understood
  • unchecked: Old super accounts consolidated through myGov
  • unchecked: Offer confirmed as base-plus-super or package
  • unchecked: First payslip checked, including the super line
  • unchecked: myGov account set up and linked to the ATO
  • unchecked: Work-related receipts kept from the start

Scenarios

Scenario 1: You work two casual jobs

Claim the tax-free threshold on the higher-paying one only. Claiming on both under-withholds at each and produces a bill you did not expect.

Scenario 2: You are comparing two offers with the same number

Ask each employer in writing whether the figure is base plus super or a total package. The answer can separate two apparently identical offers by the full super percentage.

Scenario 3: You have had four casual jobs and never chose a fund

Log into myGov, look at your super accounts, and consolidate. Multiple accounts mean multiple sets of fees and often duplicate insurance premiums eating a small balance.

Tip: Check your first payslip shows a super contribution, then check it actually arrives in your fund. Unpaid super is more common than people expect, and raising it in month one is a quick conversation — raising it a year later is a formal complaint.

Do's and Don'ts

Do

  • Apply for a TFN before you start work
  • Claim the tax-free threshold on one job only
  • Ask whether an offer is base or package
  • Consolidate old super accounts
  • Verify super contributions actually arrive
  • Keep receipts for work-related expenses

Don't

  • Start work without a TFN and accept top-rate withholding
  • Claim the threshold on two jobs at once
  • Compare two salary figures without checking the convention
  • Let super accounts accumulate across casual jobs
  • Assume super is deducted from your pay — it is paid on top
  • Ignore your payslip until something looks wrong

Common Mistakes

  • Working without a TFN. You are taxed at the top marginal rate until you provide one.
  • Claiming the tax-free threshold twice. Both employers under-withhold and you get a bill at tax time.
  • Confusing base with package. The same headline number can differ by the whole super percentage.
  • Accumulating super accounts. Each one charges fees and often insurance on a small balance.
  • Never checking super is paid. Unpaid super is real, and month one is when it is easy to fix.
  • Not keeping receipts. Deductions are hard to substantiate reconstructed from memory in July.

Keep building on this with the related guides in this series:

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Frequently Asked Questions

What happens if I work without a TFN?

You are taxed at the highest marginal rate on all earnings. The money is recoverable when you lodge a return, but you are without it until then.

What is superannuation?

A compulsory employer contribution paid on top of your salary into a retirement fund in your name. It is not deducted from your wages, and the rate is set by legislation.

Should I claim the tax-free threshold?

Yes, but from one employer only — normally the highest-paying one. Claiming it on two jobs leads to under-withholding and a tax bill.

What is the difference between base and package?

"Plus super" or "base" means super sits on top of the figure. "Package" or "total remuneration" means super is included within it. Always ask which applies.

When is the Australian tax year?

1 July to 30 June. Most people lodge a return after 30 June through myGov, where the information is largely pre-filled.

Can I get my super back if I leave Australia?

If you are on a temporary visa and depart permanently, you may be able to claim it through the Departing Australia Superannuation Payment, though it is taxed on withdrawal.

What is the Medicare levy?

A percentage of taxable income funding the public health system, charged on top of income tax for most tax residents. A separate surcharge applies to higher earners without private hospital cover.

When do HECS-HELP repayments start?

Automatically, once your income passes a repayment threshold. Tell your employer about the debt on your declaration form so enough is withheld through the year.

Am I an Australian resident for tax purposes?

It depends on the pattern and length of your stay, not on your visa. Many temporary visa holders are tax residents. The ATO publishes a residency test, and an unclear case is worth one conversation with a tax agent.

Can I claim my tax agent's fee?

Yes - fees paid to a registered tax agent for preparing your return are deductible in the following year's return, which makes professional help for a complicated first year cheaper than it appears.

What can I actually claim as a deduction?

Work-related expenses you paid for yourself and were not reimbursed for - tools, professional memberships, certain training, and some home-office costs. Keep receipts from the start; reconstructing the year in July does not work.

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