Understanding tax and superannuation in Australia

Photo by StudyPerth

International students in Australia have the same workplace rights as all other working Australians, including access to superannuation.

Tax for international students

If you are enrolled to study in Australia in a course that is 6 months or longer, you are considered an Australian resident for tax purposes. This means you must pay tax on any income earned at the same tax rate as all other Australian workers. 

Your employer will pay the tax to the Australian Taxation Office (ATO) for you on any amount you earn above AU$18,200 each year. Income below this amount is tax-free.

The rate at which you are taxed depends on how much you earn. You can find 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 ATO to identify you. You will need a TFN to:

• Open an Australian bank account

• Collect wages/income from work

• Pay the minimum tax rate

You can apply for a TFN on the ATO website. You may have to provide identification documentation like your passport or travel documents.

Superannuation for international students

What is superannuation?

In short, superannuation is your retirement fund. Referred to as 'super' by Aussies, it's money put aside by your employer over your working life for you to live on when you retire from work. 

As an international student you are entitled to receive super from your employer. The minimum superannuation contribution is 12% of your earnings, and this is paid on top of your income (i.e. it won't come out of your pay). 

Super contributions by your employer must be paid at least quarterly (every 3 months) into your nominated superannuation fund. 

Superannuation is compulsory in Australia, and cannot be accessed until you reach the age of 60. However as an international student, you may be eligible to have your super paid out to you (less tax) when you permanently leave Australia. Find out more about claiming your super when leaving Australia.

Choosing a superannuation fund

When you get your first job in Australia, if you don't already have a super fund and don't nominate one, your employer will pay your super into their default fund, which then becomes your super account.

If you would prefer to choose a superannuation fund, make sure to set one up before you start working and provide the details to your employer. That way, they can pay directly into the super fund that you have nominated. 

There are many super funds you can choose from. We would recommend doing your research and comparing the super fund available. The ASIC Money Smart website has some great advice about picking your perfect super fund.

What to do if your super hasn't been paid

If you think your superannuation hasn’t been paid, you can make a complaint to the Australian Taxation Office. But before you do this, you should follow a checklist listed on the Fair Work Ombubsman website:

• know the award or registered agreement covering your employment

• check if your award or agreement has extra terms about super (use the filter above or see our full list of awards)

• check a pay slip to see if it has information about your super payments

• contact your super fund to find out whether a payment has been made

• talk to the employer if you have any concerns.

The Fair Work Ombudsman also has a Translating and Interpreting Service if you have trouble speaking or understanding English.

Consolidating your super

When you move from one job to another, it's important to give your new employer the details of your existing super fund so they can continue paying into it. If you don't provide those details, your employer will usually pay your super into a stapled fund - your existing super account that's linked to you follows you from job to job. If you don't have a stapled fund, your employer will pay your super into their default fund, which means you could end up with more than one super account, paying multiple sets of fees.

If this happens, it's not a big deal, you can easily consolidate the two funds into one. You can find the steps to consolidating your super on the ASIC Money Smart website.

This blog post is the intellectual property of StudyPerth and is being used on this site solely as a representation of my work.