Each country has its own financial system with different nomenclature that can confuse those who are not used to it. That's why we've prepared a guide to help you better understand Australia's "finances".
Financial glossary:
Australian Taxation Office (ATO): It is the agency responsible for Australia's finances and tax system. Click here to access the official ATO website.
Tax File Number (TFN): It is a nine-digit number issued by the ATO that identifies the taxpayer. Similar to the CFP in Brazil, the TFN would be your identity for tax and for the Australian "guarantee fund".
Australian Business Number (ABN): It is the registration number of a company, similar to the CNPJ. Those who use the ABN must issue invoices to the contractor after providing a service, just like in Brazil. Click here to find out more about ABN.
Tax Return: The process where you submit your gross annual income to calculate the tax due. In most cases, the salary (excluding cash in hand) you receive already comes with the necessary deduction. At the end of the tax year, taxpayers must declare their gross income and the total amount of tax withheld during the year (depending on the amount, you may be entitled to a partial or full refund). Click here to find out more about the Tax Return.
It's worth remembering that self-employed professionals - and those who are paid in cash - must declare their income and pay the tax due. Tax evasion is a crime, so be smart!
Financial Year - Annual period used to calculate financial statements. In Australia, the fiscal year begins every 01/07 and ends 30/06 of the following year.
PAYG/ Payment Summary/Group Certificate - Essentially, there are three different names for the same item. Issued by the employer, the document contains the gross payment received by the employee and the amount of any tax withheld.
Invoice - Document issued by a service provider for the purpose of receiving payment for services rendered.
Tax Rate - Income tax is progressive, increasing according to the taxpayer's income. The first $18,200 received from the annual salary is exempt - you are only taxed if you receive more than this amount.
Superannuation - It's a kind of private pension fund mixed with the Brazilian guarantee fund (FGTS). The fund basically works like a bank managing the contribution paid by the employer - which varies according to the salary received by the employee.
Superannuation is an income accumulation scheme designed for retirement. Early withdrawal is only allowed in very specific situations - such as an immigrant who decides to leave Australia permanently.
Frequently Asked Questions
When should I apply for the Tax Return?
The deadline for filing tax returns for the last fiscal year is 01/07 until 31/10.
What documents do I need to declare my income?
For those working on TFN, the payment summary or the latest payslip. Professionals who use ABN must present invoices issued during the year. If the professional has not issued an invoice, a bank statement may be an option for proof of income. Click here to see more.
I'm leaving Australia before the end of the tax year, can I apply for my Tax Return early?
Yes, you will need your last payslip for each job you did during the tax year. Click here to return home without any hang-ups.
What is required to open an account with a Superannuation fund?
There are many superannuation funds in Australia. Talk to a Financial Adviser and find out which fund could benefit you best.
Normally, every company that hires from the TFN opens a superannuation fund for the employee. If you already have an account, let your employer know. You have the right to choose the most attractive fund for your situation. It's important to keep your superannuation concentrated in just one account to avoid fees and charges.
I'm leaving Australia. Can I withdraw my superannuation?
Yes. Those who do not plan to live in the country permanently are entitled to recover part of the fund. However, the redemption process can only be started after the taxpayer has left Australia and had their visa canceled or expired. It is important to bear in mind that, in this case, the taxpayer gets back a maximum of around 60% of the total amount.
