Are you an international student studying in Australia? If you have been studying in the country for six months or more, you may need to consider your tax obligations. Understanding how taxation works for international students can be confusing, but getting it right ensures you meet legal requirements while maximising any available tax benefits.
Paying taxes and lodging tax returns can feel overwhelming, especially if you are unfamiliar with the Australian tax system. However, once you understand the process, you will not only know how it works, but you may also be entitled to key benefits such as the tax-free threshold, lower tax rates, and potential tax offsets.
Working Student Tax Advice
Working Student Tax Advice
If you are an international student and have been living in Australia for six months or more, you will generally be considered an Australian resident for tax purposes.
The Australian Taxation Office (ATO) states that if you reside in Australia for over six months and establish regular living patterns—such as studying, working, and having a usual place of residence—you are likely to be treated as a tax resident. This means you are eligible for the tax-free threshold, lower tax rates, and certain deductions.
Not sure if you qualify as a tax resident? You can check your status using the ATO’s online residency tool or speak with a tax professional to get the right guidance.
If you are classified as a tax resident, there are important tax rules and obligations you need to be aware of.
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If your taxable income is $18,200 or below, you qualify for the tax-free threshold, meaning you are not required to pay any income tax for that financial year.
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If you worked part-time and your employer withheld tax from your salary, you may be eligible for a tax refund, provided your total taxable income remains at or below $18,200.
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Regardless of where your assessable income comes from, you must report all income earned in Australia for the financial year ending on 30 June.
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If you have underpaid tax—either because your employer withheld less than required or you had multiple jobs where each applied the tax-free threshold incorrectly—you are legally responsible for paying the outstanding amount to the Australian Taxation Office (ATO).
Please note that the Australian financial year starts from 1 July to 30 June the next year.
What if your course runs for less than six months? If your stay in Australia is less than six months and you plan to leave the country after completing your course, you will still need to lodge a tax return for any income earned while in Australia.
However, because you are not considered a resident for tax purposes, you will not be entitled to the tax-free threshold. This means you will be taxed at the non-resident rate, which starts at 30% from the first dollar earned. Non-residents are subject to higher tax obligations compared to residents, as they do not receive the same benefits and lower tax rates.
Tax Return Lodging Guide
Most of the time, international students are not fully aware that they can claim tax returns. Those who have low-income jobs, as well as those working part-time, pay more than what the law actually requires. By lodging a tax return, you ensure that you get the tax refund that you deserve.
Ready to lodge a tax return? Here’s what you need to do:
Remember that the tax year ends on 30 June. Make sure that you lodge your tax return on or before 31 October. If you need more time, using a registered tax agent (like us) can extend your deadline. If this is your first time lodging a tax return, we recommend checking out our comprehensive guide to make the process easier.
If you are permanently leaving Australia before 30 June, you can still lodge your tax return early. To do this, you must file a paper tax return, as early lodgments cannot be done online. Since paper returns take longer to process, it’s best to submit it as soon as possible before you leave.
If you don’t have time to file a paper return before leaving, you can still lodge your tax return online after 30 June using TaxReturn.com.au, even from outside Australia.
Requirements in Lodging a Tax Return
All taxpayers should have a Tax File Number or TFN. If you are an international student, you are not exempted from this rule. You can still lodge a tax return without a TFN. However, you could get taxed at an even higher rate if you do not have it. You can get your TFN through the ATO website.
Alternatively, you can visit the Australian Taxation Office and get the application form there. You can send it back, along with the requirements to any tax office. These requirements include:
- Your bank statements, which should show the interest you received
- Dividend slips that show payments from organisations where you have shares
- Payment summary, which you can get from your employer and contains the tax withheld and total income earned
- Photo ID
- Receipts, work-related expenses, and other invoices
If you are sure that you will receive a tax refund, be ready with your bank account information. That way, the refund will be deposited right away.
Income and Deductions
Tax time can be a stressful time for many Australians. Whether it’s your first time to lodge or you’re a seasoned tax veteran, it can still seem like an inconvenience. The rules can be obscure. For example, what you can claim as expenses or what you need to declare.
This is where TaxReturn.com.au wants to make things easier for you.
- A taxable income of $18,200 or below means that you belong to the tax-free group. In this threshold, you are not required by law to pay any income tax each financial year.
- If you worked part-time and your employer deducted from your salary the income tax, you most likely qualify for a refund. That is, if your total taxable income from this job was $18,200 or lower.
- You should pay your tax no matter where your assessable income for the year ending on 30 June comes from.
- If you paid inadequate tax or your employer deducted less than the tax you owe from your assessable income, you are legally required to pay the remaining amount.
You can claim deductions to reduce your taxable income. Deductions are claimable amounts that you spent on purchases or any payments that directly relate to your income or how you earn it. Deductions can either be self-education, work-related, or personal.
Some of the most common deductions you can claim include:
- Purchase of protective clothing, uniforms, and other compulsory work garments
- Work-related expenses on phone and Internet
- Travel expenses incurred between work sites (but not between home and work)
- Home office expenses, such as printers, computers, heating and cooling, and lighting
- Union fees
- Subscription fees related to work
If you have briefcases, calculators, and other tools of the trade, you may be able to claim deductions for them. However, they should only cost less than $300. Claiming a deduction is made easier if you have receipts, bank statements, invoices, and other records.
Do You Have More Questions?
International students may want to do their taxes on their own using ATO’s myTax. However, the system can be quite confusing, and it is not always best for everyone. If you need expert assistance, you can contact TaxReturn.com.au. We will help ensure that you have included all the deductions you are eligible for and check your tax return’s accuracy.
Start your tax return or talk to us today on 0499 829 829.
