Tax and superannuation

As an international student in Australia, it is important to understand your obligations when it comes to tax and superannuation.

Do I need to pay tax in Australia?

In general, international students are required to pay tax in Australia. There are a couple of ways you may pay tax: via GST and income tax.

GST - or Goods and Services Tax - is a 10 per cent tax applied to the things you buy, such as grocery items, haircuts and textbooks. Certain things are exempt from GST, such as international flights and tuition costs.

By law, the price displayed by shops and online stores must include GST, so you will not have to calculate it yourself. The price you see listed is the amount you will pay.

Tax is also collected on your wages or income, such as money made at work or through a business.

If you are an employee, your employer will likely deduct tax from your pay before you receive it. If you are self-employed, you will have to pay your own tax.

International students are typically considered Australian residents for tax purposes, but there are some exceptions (e.g. if your course is less than 6 months in length).

As a resident for tax purposes, you will pay the same tax rate as Australian citizens. You will also be eligible for the tax-free threshold, meaning you will not be required to pay any tax on a set amount of the income you earn in Australia.

From there, your tax rate will be determined by how much you earn. Explore the full list of Australian tax rates here.

Getting a tax file number (TFN)

A tax file number (TFN) is a unique code used by the Australian Tax Office (ATO) to identify you. You will need a TFN to:

Open an Australian bank account
Collect wages/income from work or business earnings
Pay the minimum tax rate, including on wages, dividends and interest

If your course is less than 6 months in length or you do not plan to work in Australia, you may not require a TFN.

You can apply for a TFN for free via the ATO website. You may have to provide documentation like your passport or travel documents to confirm your identity.

Superannuation

Superannuation, often called ‘super’, is a retirement account. If you are employed by a business, your employer is required to make contributions to your super. If you are self-employed, you can decide whether you wish to contribute to your own retirement fund.

You cannot access the money in your super account until you are 65, except in special circumstances. Temporary residents, like international students, can apply to access their super when they leave Australia less any applicable tax.

Lodging an international student tax return

If you are an Australian resident for tax purposes, you will need to lodge a tax return at the end of each financial year.

The Australian financial year ends on 30 June. If you are an employee, your employer must provide you with a payment summary by 14 July. These are also typically submitted directly to the ATO via Services Australia. However, you will need this documentation to lodge your international student tax return (which must be submitted by 31 October at the latest).

Once lodged, the ATO will compare the amount of tax you have paid and how much you should have paid. You may receive a refund or be asked to pay the difference if you did not pay enough.

You can lodge your return yourself through the ATO or use a third party, like an accountant. Check with your educational institution to see what financial guidance they may offer.

If you earn less than $60,000 per year, you can also access the ATO’s Tax Help Program for assistance with setting up an account, understanding your requirements and lodging your return.

Medicare exemption

Medicare, Australia’s public health system, is paid for with the Medicare Levy.

If you are not eligible for Medicare and have private health insurance (such as Overseas Student Health Cover), you may be eligible for a Medicare levy exemption.

To access this, you will need to request a Medicare entitlement statement (MES). You must get a new MES each year.