Understanding Australian Tax and Superannuation: A Simple Guide for Newcomers
When you start your first job in Australia, you’ll notice that your payslip looks a little different from what you might be used to.
There are new terms like tax withheld and superannuation contributions, and it can be confusing at first — especially if you’ve just moved here for work or study.
This guide explains the essentials of how tax and superannuation work in Australia, and what you can do to stay on top of both from day one.
1. Understanding the Australian Income Tax System
Australia uses a progressive tax system, meaning that the more you earn, the higher your tax rate.
If you’re considered a resident for tax purposes, you also receive a tax-free threshold — you don’t pay any tax on the first $18,200 of income each year.
Below is a simplified version of the 2025-2026 tax brackets for residents:
| Taxable Income (FY26) | Tax on This Income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 + 45c for each $1 over $190,000 |
*Excludes Medicare levy (~2%). Source: Australian Taxation Office (ATO)
Your employer automatically deducts tax from your wages and sends it to the Australian Taxation Office (ATO) — this system is called PAYG (Pay As You Go) withholding.
At the end of each financial year (30 June), you’ll need to lodge a tax return.
This ensures you’ve paid the right amount of tax, and if you’ve paid too much, you’ll receive a tax refund.
If you’re wondering how to estimate what your pay looks like after tax, check out our detailed guide:
👉 How to Work Out Your Take-Home Pay in Australia (With Example)
2. When and How Do You Lodge a Tax Return (and What Period It Covers)
Australia’s financial year runs from 1 July to 30 June, not the same as the calendar year.
Your tax return covers all income earned during that 12-month period — including salary, wages, bank interest, and any side income.
You generally need to lodge a tax return if:
You earned any income during the year
Tax was withheld from your pay
You want to claim work-related deductions
You are considered a resident for tax purposes
Lodgement period:
Opens 1 July (after the end of the financial year)
Closes 31 October (if you lodge it yourself via MyGov)
You can lodge in two ways:
Online through MyGov → ATO → myTax — quick and free.
Through a registered tax agent — they can lodge later if you’re on their client list.
Even if you earned below the $18,200 tax-free threshold, it’s still worth lodging.
You might receive a refund if your employer withheld tax from your wages during the year.
3. The Importance of a Tax File Number (TFN)
Your Tax File Number (TFN) is your personal identification number with the ATO — similar to Indonesia’s NPWP.
It ensures you’re taxed correctly and helps you access government services like Medicare and superannuation.
Without a TFN:
Employers and banks must withhold tax at the highest rate (45%)
You can’t claim tax refunds or link your MyGov account properly
You can apply for a TFN free of charge through the ATO website.
4. Tax Residency — What It Means
Your residency for tax purposes may differ from your visa status.
International students usually qualify as Australian residents for tax if they stay for more than six months.
Working holiday visa holders are typically non-residents, taxed at different rates.
You can confirm your status using the ATO’s residency tool.
5. What Is Superannuation (Super)?
Superannuation — or “super” — is Australia’s retirement savings system.
Employers must contribute 11.5% of your regular earnings into a super fund on your behalf.
For example, if you earn $1,000, your employer pays an additional $115 into your super fund — on top of your wages.
This money is invested and grows over time for your retirement.
You can choose your own super fund (e.g. AustralianSuper, Hostplus, ING Super, or Rest) or use your employer’s default fund.
6. Accessing and Managing Your Super
You can normally access your super only after reaching preservation age (between 55–60, depending on your birth year).
If you’re a temporary resident, you can withdraw your super after you permanently leave Australia through the Departing Australia Superannuation Payment (DASP) process.
Manage your super easily by linking your MyGov account to the ATO, where you can:
View all your super accounts
Combine (roll over) multiple funds
Check contributions and investment performance
7. Claiming Deductions and Tax Refunds
When lodging your tax return, you can claim deductions for eligible work-related expenses such as:
Tools, uniforms, or protective clothing
Work-related travel or equipment
Home office expenses (if applicable)
Professional memberships or union fees
The ATO’s myTax system simplifies this, or you can use a registered tax agent for tailored help.
8. Tips to Stay on Top of Your Tax and Super
Keep all payslips and receipts for deductions.
Ensure your super contributions appear on each payslip.
Nominate your preferred super fund early to avoid multiple accounts.
Update your TFN with your employer and bank once you receive it.
Review your super investment option (Balanced, Growth, or Conservative).
Final Thoughts
Understanding how tax and superannuation work is essential to managing your finances in Australia.
It helps you plan for your future, avoid unnecessary tax, and take control of your financial wellbeing.
Start by checking your TFN, setting up MyGov, reviewing your payslips, and lodging your return on time — small steps that will make a big difference in the long run.
Welcome to Australia — your financial journey starts here. 🇦🇺