Paying taxes regularly is an integral part of our civic responsibilities. The money we pay in the form of taxes is eventually spent on welfare activities. So, it’s important to pay our taxes on time! But the question for any Australian might be, “When do you start paying taxes in Australia?”
Just like everything else, there’s a correct time for paying taxes. You have to be eligible in certain criteria to pay taxes. You have to pay your taxes in time to prevent any legal jeopardy in the long run. Furthermore, paying taxes in time comes with its own share of benefits in the form of deductions and subsidies.
In this article, we’re going to discuss certain factors that play a role on when do you start paying taxes in Australia. Let’s begin!
When Do You Pay Taxes in Australia?
When you pay taxes, depend on a lot of factors. These include age, minimum income, residence, etc. Here’s everything you need to know about them!
What Age Do You Start Paying Taxes in Australia:
You have to reach a certain age to be eligible to pay taxes. In Australia, everyone under the age of 18 is considered a minor, and aren’t eligible for taxes. However, certain people are exempted from this list and are supposed to pay taxes regularly.
However, certain people are considered to be “excepted person” who are supposed to pay taxes based on their income. These include people who have managed to complete their formal education and are currently doing full-time jobs. You’re also supposed to pay taxes if you’re disabled and received support from disabled trust, and you’re the main beneficiary. Also, for people who are “double orphans”, i.e. lost both of their parents and rely on the double orphan pension, you have to pay taxes accordingly.
Furthermore, certain income is considered to be excepted income which is taxable even if you’re under 18. These include revenue from assets and investments, pension and superannuation funds (if you have any via inheritance), or have your own business running.
If you receive any sort of excepted income, you have to pay taxes based on it. However, they are somewhat technical, so we recommend that you consult your tax lawyer or tax accountant before going with the taxes.
Minimum Income:
The most common answer to when do you start paying taxes in Australia is whenever you’re eligible. However, the conditions are different for different groups of people.
If you’re an Australian resident, you will be eligible for taxes if you make more than 18,200AUD per year, according to the new guidelines by the Australian Taxation Office.
| Range | Amount of Tax Payable |
| 0 – 120,000AUD | 32.5 cents for each 1AUD |
| 120,001 – 180,000AUD | 39,000AUD plus 37 cents for each 1AUD over 120,000AUD |
| 180,001AUD and over | 61,200AUD plus 45 cents for each 1AUD over 180,000AUD |
The amount of taxes to be paid by Australian residents in this fiscal year is:
Foreign Residents:
Individuals who live in Australia due to their work commitments are also supposed to pay taxes on their annual income at the end of every fiscal year. However, the rules are slightly different for foreign residents.
So, when do you start paying taxes in Australia as a foreign resident? Check the table to find out!
| Range | Amount of Tax Payable |
| 0 – 120,000AUD | 32.5 cents for each 1AUD |
| 120,001 – 180,000AUD | 39,000AUD plus 37 cents for each 1AUD over 120,000AUD |
| 180,001AUD and over | 61,200AUD plus 45 cents for each 1AUD over 180,000AUD |
However, as a non-Australian resident, you have to lodge a tax return for any amount of money you make in Australia. You might also be eligible for some additional fees based on your tax return.
However, once you receive Australian resident status through the residency test, you can apply for tax deductions on your initial expenses. Generally, you’re considered an Australian after 183 days of living in Australia. So, make sure you check all your residential details beforehand.
Working Holiday Makers:
Working holiday makers are people who work as in Australia temporarily under the visa subclass 417 or 462. Since they’re temporary residents, they are considered for different taxation laws.
The taxation rules are somewhat more stringent on working holiday makers since they’re staying only for a brief period. Also, just like non-resident Australians, they have to lodge tax returns on any amount of money they make during their time in Australia.
The range and amount of payable taxes on working holiday makers are:
| Range | Amount of Tax Payable |
| 0 – $45,000 | 15% |
| $45,001 – $120,000 | $6,750 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45 cents for each $1 over $180,000 |
Conclusion:
Paying taxes is essential for everyone. Whether you’re an individual or a business, you have to pay taxes if you’re eligible. However, many people aren’t sure about taxes and hence make mistakes or delay their payments.
In this article, we’ve answered the question of when do you start paying taxes in Australia. We hope you found this helpful!