A-guide-for-students--Jobs-and-taxes

A guide for students: Working in Australia

Information verified correct on December 8th, 2016

Your first job will put you on the path to independence. Here's what you need to know about working in Australia.

If you've just started work or are currently working, you don't have to rely on anyone else as much. However, this means that you need to be aware of certain things so let's look at exactly what they are.

What you need to know about working in Australia

Getting your first job means understanding not only the types of employment available in Australia but also the benefits you are entitled to under each form of employment. The more you know about your rights, the smaller the risk is of you getting taken advantage of.

Types of employment and relevant benefits

First of all, it's important you understand the different types of employment, which are as follows:

  • Full-time employment. As a full-time employee, you will be working on average 38 hours per week and will generally have an ongoing position. A full-time position means that you are entitled to all the conditions laid out by the National Employment Standards, including a maximum number of work hours per week, paid sick leave, paid holidays, public holidays and a notice regarding the loss of your position.
  • Part-time employment. As a part-time employee, you will be on average working less than 38 hours per week. Employment is usually ongoing and you will be working the same set hours. You have the same rights as a full-time employee but these rights will be calculated based on the number of hours you work.
For example

The National Employment Standards (NES) state that full-time employees are entitled to four weeks of annual leave per year. If you work an average of 20 hours per week, you will accumulate 4 part-time weeks of annual leave, or 80 hours of leave, compared to a full-time employee who would accumulate 4 full-time weeks of leave or 152 hours.

  • Casual employment. As a casual employee, you will be paid according to the number of hours you work. While there is no guarantee regarding the number of hours you will work per week, you might work regular hours. Generally, if you are a casual employee, you will get a higher rate of pay, referred to as 'casual loading', in lieu of some of the advantages you would get as a full-time or part-time employee. For example, as a casual employee, you don't have paid sick leave or paid annual leave.
  • Apprentice/trainee. If you are an apprentice or a trainee, this means you have a formal training agreement with an employer, which is a combination of work and study so you can receive a certain qualification, certificate or diploma. If you are old enough to work, you can become an apprentice or trainee and this arrangement can be full-time, part-time or school-based. The amount you will be paid varies according to the years of school you have finished, the number of years of training you have received, the type of apprenticeship or traineeship, the industry or job and the award, agreement or contract that covers your employment. In general, you can expect to get a percentage of what a qualified tradesperson would be paid. Your wages will also be determined according to how long you've been an apprentice. For example, if you are in year two of an apprenticeship that lasts four years, you might get 70% of what a qualified tradesperson would earn.
  • Contractor. It is important to understand the difference between an employee and a contractor. You are a contractor if you are self-employed and provide a specific service to clients. For example, a plumber that gets called in to fix a blocked drain by a business will perform the work using his or her own tools and then invoice the company for the job. He or she is a contractor and not an employee.
  • Shift worker. You are a shift worker if you fit the definition in the award or agreement that is applicable to your situation. If you aren't covered by an award or agreement, you are considered a shift worker if you work in a business where shifts are continuously rostered 24/7 and are regularly rostered to work said shifts. You are also a shift worker if working on public holidays and Sundays is a regular occurrence. Note that as a shift worker, you have to right to receive shift loading for all the hours you work, which is determined according to the award or agreement that applies. You are also entitled to an additional week of annual leave every year.
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The Australian minimums: working age and wage

Australian legislation states that if you are over 18 years old, you have the right to earn at least $606.40 per week or $15.96 per hour, which means that no employer can pay you less than this amount. Note that this applies to you even if you aren't a citizen of Australia. If you are under 18 years of age, the pay rate varies according to how old you are. You can learn more about your rights in this case by visiting the Fair Work Australia website.

Remember:

Title
  • The general minimum age is 13 years old to start work.
    • However, if you are at least 11 years old you can perform delivery work, like delivering the newspaper or leaflets. Note that if you are 11 or 12 years old, you are not allowed to perform these tasks between 6pm and 6am.
  • If you will be working in the family business or the entertainment industry, note that there is no restriction regarding your age.
  • For anyone under the age of 16 who is obligated to be enrolled in school, the consent of the parents' or legal guardians is required. Once you are 16 or have completed year 10, whichever happens first, you can work full-time.

There are other restrictions that apply. For example, it is illegal for someone to employ you during the hours you should be in school and there are also limits in terms of how many hours you can work.

If you are under 16 and obligated to be in school:

  • You are not allowed to work more than 12 hours during the school week and no more than four hours per day.
  • You are not allowed to work more than 38 hours during school holidays and no more than eight hours per day.
  • You are not permitted to work more than four hours without a one hour break.
  • You are not allowed to work if you've done work for the same employer within the previous 12 hours.
  • You aren't allowed to work more than one shift per day.
  • You aren't allowed to work more than one shift per day.
  • You aren't allowed to work between 10pm and 6am.

A child who is not old enough to start school may not:

  • Work in excess of 12 hours per week.
  • Work in excess of four hours per day.
  • Work if you have already performed work for the same employer within the prior 12 hours.
  • Work more than one shift per day.
  • Work between 10pm and 6am.
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Superannuation

Superannuation guarantee contributions

Superannuation is a method used to ensure you have funds for your retirement. These savings are the result of contributions your employer makes to your super fund and, in the best case scenario, additional contributions you made. In some cases, the government will also add to this fund via co-contributions and low income super contributions.

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    Remember:

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    Note that your employer is obligated by law to pay nine per cent of your salary into a super fund. This percentage is referred to as the Super Guarantee. This percentage will increase on 1 July, 2013 and on 1 July, 2014 with 0.25 percentage points each and will continue to grow by 0.5 percentage points after that every year until 2019, when this rate will be 12%.

    Throughout your working life, these contributions made by your employer as well as yourself and the government, if applicable, add up. The money is also invested by the super fund, which means it increases over time. This means that when you retire, you will have some money to live off.

    Your first job and superannuation

    When you are over 18 years old and get a job, as long as you are earning at least $450 before tax, you have the right to superannuation guarantee contributions from your employer. It doesn't matter whether you are a full-time or part-time employee - if you are working, you have the right to receive superannuation guarantee payments because these amounts were derived from prior pay rises that were offered as superannuation payments.

    First job and looking after your superannuation

    However, there are certain eligibility conditions. You must be working a minimum of 30 hours per week and this also covers contractors who are mainly paid for the labour they perform for an employer. Your employer is obligated to pay the superannuation guarantee, which is nine per cent of your income before tax, every three months into your super fund. These contributions are over the salary or wages you earn. You can pick your own super fund or you can let your employer send the contributions to any fund they choose. You will have to fill out a 'Standard Choice Form' your employer will provide you with if you want to redirect your superannuation contributions to a fund of your choosing.

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    Tax in Australia

    When you start working, you will have to get a tax file number. Income tax is the main tax you will pay, which is calculated according to the income you earn. This means that you need to file a tax return every year to inform the Australian Taxation Office of how much you earned that financial year and the level of tax you've paid.

    Remember:

    Title

    Tax is essentially a fee you pay to the government so they can provide services and benefits to the community.

    Generally, tax is payable during the year you earned the income. In the case of employees, the employer will deduct the tax from your paycheque. The amount you pay depends on how much you earn and if you can claim deductions such as costs related to work.

    Getting your Tax File Number (TFN)

    If you want to enjoy taxation advantages, you will be required to register with the Australian Taxation Office (ATO) to get a tax file number (TFN). You will have the same TFN for your entire working life but if you don't have this number, you will have to pay 45% tax on everything you earn.

    Once you get your TFN, though, you won't have to pay any taxes at all on the first $18,200 of your income, which is referred to as a tax-free threshold. For every dollar you earn over this threshold, up to $37,000, you will have to pay 32.5 cents tax per dollar. The level of tax you will have to pay over $37,000 can be determined by visiting the ATO website.

    If you still attend high school, you can apply for a Tax File Number through your careers advisor. If you don't attend high school, you can apply for one through the ATO website.

    Your taxation obligations

    On 30 June, which is the end of the financial year, you will get a summary of the amounts you have earned throughout the year as well as the level of tax your employer has withheld from your wages, also referred to as Pay As You Go (PAYG) withholding and paid to the ATO.

    Subsequently, you will need to fill out a taxation return and file it with the ATO by the 31 of October, along with the certificate your employer issues, which is referred to as a group certificate. If the PAYG withholding has been too high and too much was paid to the ATO, you will have the right to receive a refund. However, if the amount deducted is too low, you will have to make up the difference and pay it to the ATO.

    Knowing your tax obligations

    You will have to include all the money you have earned throughout the year and not solely the amounts your employer paid you. You will also have the chance to claim some deductions that will lower the amount of your earnings that is subject to tax, which means you will have to pay less in taxes.

    The following table shows some of the income sources you need to declare as well as a few of the deductions you can claim.

    Income sources you need to declare

    Deductions you can claim

    Employment incomeCar expenses if you use your car to earn your income
    Investment incomeAccount-keeping fees for accounts you hold for investment purposes
    Capital gains incomeTravel fares, meals, accommodation and other travel expenses for work
    Foreign incomePurchasing and cleaning clothing for work such as uniforms and protective work clothes
    PensionExpenses for the management of your tax affairs, including paying tax advisers, the expense of purchasing tax reference materials and the cost of travelling to get tax advice

    A lot of people choose to fill out their taxation return every financial year but others opt to resort to a specialist tax accountant. This depends mainly on how complicated your income has become over the financial year and how many deductions you can claim.

    If you are self-employed and have done a lot of jobs throughout the year, you might find it more complicated to fill out your return than someone who has a single income stream, like a full-time job. In a simpler situation like the latter, you can get a 'Tax Pack' form the post office or a newsagent. All you have to do is read the instructions and fill out the form accordingly. Return it to the ATO along with any relevant evidence of your claims and you're done. Tax returns can also now be submitted online via a system known as MyTax. This can be done via the ATO website. Go to the website and then click on the MyTax link and follow the instructions onscreen.

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    Shirley Liu

    Shirley is finder.com.au's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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    4 Responses to A guide for students: Working in Australia

    1. Default Gravatar
      | June 29, 2015

      I am in the hospitality industry as a barrister. I work and get paid as a full timer employer but have worked on a couple of public holidays, am I supposed to not be working on public holidays?

      • Staff
        Belinda | July 7, 2015

        Hi Katherine,

        Thanks for your enquiry.

        Please note that finder.com.au is an online comparison and general information service.

        Generally if you’re a shift worker you may be required to work on some public holidays. If you’re also an employee, you should get paid at least your base rate for all hours worked on a public holiday. In addition, you may also receive additional entitlements for working on public holidays such as extra pay, additional leave, or a minimum shift length on the public holiday.

        You’ll need to speak directly with your employer regarding whether or not you should be working on public holidays, and the compensation you should receive.

        Thanks,
        Belinda

    2. Default Gravatar
      Angela | March 30, 2015

      Hi there,My son his 16 and he born in Australia needs a TFN what is the easy way to do it?

      • Staff
        Shirley | March 30, 2015

        Hi Angela,

        Thanks for your question.

        You son should be able to apply for one through his school. He can approach the school office to do this.

        Cheers,
        Shirley

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