How to claim a tax refund from Australia
You might be entitled to a tax and superannuation rebate amounting to thousands of dollars
If you have worked and paid tax in Australia for at least six months over the past seven years, you might be eligible for a substantial tax refund, and with the current financial year ending this Monday, now is a good time to start thinking about applying.
How much tax you pay in Australia and how much you are entitled to claim back depends on several factors, including how long you have been living there, how much you earned, and what type of visa you are on.
Most workers who have lived in Australia for at least six months are considered “resident for tax purposes” and are entitled to a certain amount of tax-free earnings, up to $18,200 (€12,570) if they have been resident for the full tax year. Earnings over this threshold are taxed at 19 per cent up to $37,000, and so on (see here for a full list of income tax bands).
As a foreign resident, ie for your first six months in Australia, you are taxed 32.5 per cent on earnings up to $80,000 (comparable to “emergency tax” in the Irish system). But if you stay longer than this and become resident for tax purposes, you could be entitled to claim some or all of this tax back, either at the end of the tax year or before this if you’ve already left Australia.
(Note: People travelling on working holiday visas are taxed as foreign residents at 32.5 per cent).
All workers who have paid tax in Australia (including working holidaymakers) are obliged to submit a tax return for each financial year, which ends on June 31st, by the end of October (the government’s tax office website has a tool which you can use to check if you are obliged to submit a return). Based on the information in the return, the tax office will work out your refund if you’ve overpaid (or your tax debt, which is less likely).
If this wasn’t good news enough, if you have already left Australia after being employed on a temporary visa (eg working holiday or 457) you could also be entitled to a refund of your superannuation contributions, the compulsory payments made by your employer (equal to at least 9.25 per cent of your earnings) towards a pension. See here for more information on reclaiming.
Irish tax agent TaxBack.com claims the average tax refund is $2,600 for their clients, with superannuation refunds averaging $3,380. (Note however that they charge a fee of between 9 and 20 per cent for their services).
There are several other registered tax agents offering assistance with tax returns and applying for refunds, but it is possible to avoid the fees and do it yourself through the government’s online tax services, myTax (for straightforward returns) and e-tax (for more complex tax affairs, with built in calculators to help you do it correctly). If you’re already registered, the pre-filling service will automatically fill in some of the gaps on the form, though you will need other documentation such as your final payslip from each employer you have worked for to complete the return. There’s a full list of required documentation on the website.
Most refunds are issued within 12 business days using the online system. (Note: if you don’t have an Australian bank account, you must contact the tax office directly to arrange an alternative payment method).
If you have lost your payslips or have no other financial records, an agent can help to liaise with your past employers to get these documents, but, of course, you could also do this yourself.
The bad news: workers who are obliged to submit a return and don’t do so by the closing date of October 31st can be penalised, though if you submit a late return voluntarily and there is no outstanding tax to be paid, this is waived. Later returns are also permitted if using a tax agent. The good news: Even if you left Australia as far back as 2007, you may still be eligible for a tax refund.
Have your say: Have you applied for a tax refund in Australia? Did you use an agent or apply yourself, and how much did you get back? Let us know in the comments section below.