So as i was trying to get a hang of how the Australian Tax System works, with coming from a country where tax can be pretty much a maze for a dummy and very much like an ocean for a professional/student to keep up with, i feel the Australian tax is quite straight forward but not forgetting that all the tax systems have been designed such that the government would find all the conceivable ways in which a person can be taxed.:).
An Individual in Australia is taxed under three broad categories: Personal Income, Capital gain and Business Income. Also one more branch of it which i found important was that if you are a permanent resident in Australia you need to disclose your international sources of income which would be exempted if you have paid tax in the country of your income, which according to me is very well described on the Australian Taxation Office website: www.ato.gov.au
The rates of tax to be paid fall in only two separate categories with a different set of rates for foreign residents residing in Australia. So if you are a permanent resident, along with progressing in your career graph you need to prepare yourself with an adjacent goal to pay further more tax!
Now before you take up a job or start earning you need to apply for a Tax File Number which would also be required to be given to the employers which is how the very frequently heard term PAYG works, wherein the employer deducts the tax required to be deducted according to the tax rates applicable. Here it becomes very important to determine your employment status, that is whether you re working as an employer or a contractor.
Alright! Its coffee time for me now and would soon get back with one more write up whilst understanding the different aspects of the Australian Taxation System.
