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Guest friends4life

Taxes on your income

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    Guest friends4life

    Hi All,

    Please could anyone advise me on taxes in Adelaide.

     

    Is the taxes on your income roughly the same as in the UK and are there any hidden taxes because when we tried to book a hire car the price is $500 dollars plus $300 dollars taxes?

     

    We are thinking of starting our own buisness and just want to know if the taxes are roughly more or the less the same as the UK?

     

    I look forward to any advice you have and thank you for your time.:D

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    Guest Mark Xpnsit

    I'll try and answer some of your questions (with the car hire - its just like the UK, they advertise a cheap price and then load the final bill up with taxes and charges)

    Tax on income if you are employed in Australia

    You get the first $6 tax free and then are taxed according to how much you earn. 6k-35k: 15c for each $1 over $6,000. 35k-80k: $4350 plus 30c for each $1 over $35,000 etc. There is also the medicare levy (to cover basic health services) which for most people is 1.5% of taxable income. You may also have to pay the medicare levy surcharge. On a low income there are a number of tax offsets that reduce the amount of tax you have to pay.

    Tax deductions and allowances

    As with the UK in Australia there are hundreds of available tax deductions and personal allowances (travel, uniforms, home office....). There are different allowances available in Australia and the rules are slightly different. Claiming for all available personal deductions and allowances can significantly reduce the amount of tax you will pay.

    This is a link to some helpful videos and presentations that will help you understand these deductions.

     

    Hope thats a help

     

    Cheers, Mark

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    Guest fredhargreaves

    There is no NI equivalent here but don't fall for the idea that the equivalent is rolled into income tax making it effectively less. That's not the case at all. In the UK your NI payments qualify you for an Age Pension which is yours of right and which you can top up. In Australia the age pension is similar to what you would get in the UK if you reached retirement age with no NI contributions whatsoever. I.e. a means-tested social security payment which tapers away to nothing as your own income/assets increase.

     

    In the past there were retirement products which were exempt from that but they have all been legislated away now. Additionally, for employed people a lifetime of employer contributions at the statutory minimum rate will mean that hardly anyone, aged say 20-35 now, will qualify for an age Pension in the future.

     

    You may be starry-eyed about the place now but keep a plan B going for in case you want to go home later. Even if you don't, it may pay to top up your NI contributions if you already have some credit there.

     

    Note also that it is much more common in Australia for ordinary folk to use a tax accountant. Ask around extensively. Small good ones are often the best. Personally I would avoid like the plague anyone pushing financial services in an accountancy practice.

     

    Financial advice has a chequered history in Australia and it would be good to google around and understand the issues there.

     

    That said UK/Oz migration issues re tax, NI and superannuation are complex issues and if you have any substantial issues there you want to talk to someone who has good experience in those areas.

     

    In general expect to pay by the hour for advice and NEVER buy a product from someone who gave you advice. Take the advice and go shopping.

     

    Good luck.

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