Starting a job and tax
The Australia Taxation Office (ATO) is the principal revenue collection agency of the Australian government. If you have not paid income tax before, or you are new to the Australian tax system, the ATO website provides useful information on your rights and obligations.
Working as a contractor
As a contractor, you are self-employed and you're running your own business. You can be an individual (sole trader), or working in your own company, partnership, or trust.
As a sole trader some employers may ask you for an Australian Business Number (ABN) and work as a sole trader. This means your employer will ask you to invoice them for the work that you do and you will be responsible for paying your own tax.
Find out more about your rights and obligations as a contractor from the ATO website.
These resources can assist you if you work as a sole trader:
Mum I lost my job
When you are entering the workforce, it is important to know not just your rights and responsibilities, but your employer's rights and responsibilities too.
Lodging a tax return
If you are working or have earned an income during the financial year, you may be required to lodge an income tax return to the ATO.
If you are an Australian resident, the first $18,200 you earn is tax-free. This is called the tax-free threshold. Most international students will be considered Australian residents for taxation purposes. Visit ‘Work out your tax residency’ on the ATO website for more information.
International students do not have to pay the Medicare levy and should apply for a Medicare Entitlement Statement to claim the exemption. International students cannot claim a private health insurance rebate for Overseas Student Health Cover. However, if you have purchased additional extras cover, you may be eligible to claim a rebate. Visit the ATO website for more information.
If you earn less than $18,200 in a financial year, you may not need to pay income tax. If you earned more than $18,200, you may only need to pay income tax on your earnings over $18,200. If you’re not sure if you have to pay tax this year the ATO’s ‘Do I need to lodge a tax return?’ tool can help you work it out or you can speak to a Student Support Advisor at RMIT Connect for assistance.
If you do need to lodge an income tax return it is important that you only claim deductions to which you are entitled. This includes deductions for self-education expenses. You can only claim a deduction for self-education expenses when your course of study is directly connected to your current employment.
These resources from the ATO can assist you to work out eligible tax deductions: