How to claim the tax-free threshold
If you are an Australian resident for tax purposes, the first $18,200 of your yearly income is not taxed. This is called the tax-free threshold. When you start a job, your employer will give you a Tax File Number declaration (NAT 3092) to complete.
To claim the tax-free threshold, you need to place an “X” in the Yes box of question 8 'Do you want to claim the tax-free threshold from this payer?’
You have 28 days to give your employer a completed Tax File Number declaration form or to claim an exemption from quoting a TFN.
After that time, your employer must start deducting tax from your pay at a rate of 46.5%. If you don’t have, or have forgotten your TFN, you can indicate on the Tax File Number declaration that you are making an application or enquiry to get your TFN. This will mean your employer will tax you at the normal rates for 28 days.
What if you have more than one employer?
If you have more than one employer at the same time, we generally require that you only claim the tax-free threshold from the employer who pays the highest salary or wage (this is known as the primary source of income).
If you earn additional income (for example, from a second job or a taxable pension), your second employer is required to withhold tax at the higher 'no tax-free threshold' rate. If your second employer does not withhold a higher rate of tax, this may lead to a tax debt at the end of the financial year.
If you are certain your total income for the year will be less than $18,200 you can claim the tax-free threshold from each source of income.
How do I know if I am an Australian Resident for tax purposes?
Generally, we consider you to be an Australian resident for tax purposes if you:
- have always lived in Australia or you have come to Australia and now live here permanently
- are an overseas student doing a course that takes more than six months to complete
- migrate to Australia and intend to reside here permanently.
If you go overseas temporarily and don’t set up a permanent home in another country, you may continue to be treated as an Australian resident for tax purposes. If you are in Australia on a working holiday visa (subclass 417) or a work and holiday visa (subclass 462) you must place an X in the working holiday maker box. Special rates of tax apply for working holiday makers.
Payment summaries / Group certificates
Commencing from the 2018-19 financial year, Morgan McKinley is no longer obliged to give you an end of year payment summary.
Your payment summary information will be available in myGov at the end of the financial year, therefore your must register for a myGov account in order to receive it. Your payment summary information will be called an income statement in myGov.
The ATO will send a notification to your myGov inbox when your income statement is ‘tax ready’ so you or your tax agent can complete your tax return.
For any copies of income statements, you should contact the ATO directly.
If you are querying your tax rate, please refer to the ATO website or follow up with a tax professional.
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