Managing your finances
Also see Beginning a Life in Australia (Chapter 11 – Money)
When living in Australia, you must be able to handle money, pay taxes and, in most cases, operate a bank account. These pages will give you information on the basics of these tasks and provide links for further information. Nearly all businesses in Australia have multiple options for payments including cash money, cheques, debit and credit cards, and electronic funds transfer. Understanding these choices is important for everyday life.
It is vital to have a bank account in Australia. Government benefit schemes and nearly all jobs will deposit money straight into your bank account rather than giving you cash money or cheques. You should open an account within six weeks of your arrival in Australia as the only identification document you will need is your passport. After six weeks, you will require at least two items of identification and one of them, such as a driver's licence, must show a photograph or signature.
Choosing the right institution
You have a wide variety of choices in terms of where to open an account and what services are available to you. Australia has four 'big banks' and a variety of locally and foreign owned banks, building societies and credit unions. The Australian Prudential Regulatory Authority maintains a list of all deposit taking institutions in Australia. Make sure you carefully read the terms and conditions of any account that you open as many institutions charge operating fees and different accounts will have different functions.
Banking institutions offer a range of services beyond basic bank accounts including credit cards, savings accounts and money loans. Responsible use of these services can help you to afford to buy expensive items but you must always be aware of your responsibilities. Read all terms and conditions, consider your financial position, contact a financial advisor and/or consult the MoneySmart website. MoneySmart also provides some publications in several community languages. Always compare different institutions and decide which is the best option for your current circumstances.
You must pay tax to the Australian Government while you are living here. Tax is levied on a variety of different things including your income, purchase of goods and services, and operating a business. The Australian Tax Office (ATO) is responsible for the taxation of individuals and organisations in Australia. The ATO website has a wealth of information for you and also operates shopfronts across Australia for face-to-face interaction.
Tax File Number
You will need to register with the Australian Tax Office (ATO) to obtain a tax file number (TFN) shortly after arriving in Australia. A TFN is a unique number issued to individuals or organisations for identification and record keeping purposes. It is necessary to claim government benefits, receive income from an employer and to be eligible for a tertiary education loan, among other things. The fastest way to get a TFN is online. Online registration is available 24 hours a day, seven days a week. You will need your passport details and an Australian address. Application forms are also available from the ATO Publication Ordering Service or by phoning the tax file number Helpline on 13 28 61. You should receive your TFN by mail within 28 days from the day the ATO receives your application.
You will need to provide your TFN to an employer when starting a new job. Be careful who you provide your TFN to as only certain organisations can legally request it.
Income Tax Return
If you earn income while you are living in Australia, you must complete an income tax return to the ATO. An income tax return is a declaration of income for the financial year and determines whether you have paid the required amount of tax. You will need a TFN to lodge your tax return and you will be given a summary of payments called a Group Certificate for income from employers.
You have a variety of options for lodging your return including online, mail, or using a tax agent. You can lodge your tax return online. This is a free, convenient and secure service offered by the ATO. It allows the ATO to fill in parts of the tax return for you, using information provided by your employer, banks, health funds and government agencies.
To lodge your tax return online you will need a myGov account, which can be set up at my.gov.au.
Tax returns must be completed and sent to the ATO by 31 October each year unless you are using a registered tax agent. Tax agents charge a fee to maximise the amount of deductions and offsets you can claim if you have more complicated claims.
Cost of Living
Living in Australia can be expensive. Food, transport, housing and utilities are among the many items you will need to pay for on a consistent basis. It is important to get to know the rough cost of your essential items so you are not shocked when it comes time to pay or unable to pay your bills.
The best way to handle the pressure of cost of living is to plan your spending with a budget. A simple budget that identifies your earnings and your expenses over the course of a week, fortnight or month is important to understanding how much you have to spend. This will also help you to plan your savings and manage your debts.
If you are struggling with your managing your finances, the Managing my money page on the MoneySmart website has helpful information, factsheets and videos to improve your knowledge of money management. Services Australia also provides a free and confidential program called the Financial Information Service. You can also engage the services of financial advisors or planners for a fee. Financial professionals can give you advice on investments, purchase of property and many other long-term financial matters.