Australian Taxation System
Understanding tax, Tax File Numbers, and your responsibilities as a young worker
Tax is money that the government collects from people who earn income. This money is used to pay for public services like schools, hospitals, roads, police, and welfare support. Everyone who earns income in Australia must pay tax according to the law.
Why Do We Pay Tax?
Taxes fund essential services that benefit everyone in the community. Without taxes, the government couldn't provide healthcare through Medicare, build infrastructure, support people in need, or maintain public safety.
A Tax File Number (TFN) is a unique number issued by the Australian Taxation Office (ATO). You need a TFN when you start work. It's free to apply for and stays with you for life.
✓ How to Apply
Online at ato.gov.au - completely free
⏱ Processing Time
Usually 28 days
🔒 Keep it Safe
Only share with employer or bank
⚠️ Without TFN
Employer withholds tax at 47%
In Australia, you don't pay tax on the first $18,200 you earn in a financial year (July 1 to June 30). This is called the tax-free threshold. If you earn less than $18,200 per year (about $350 per week), you won't pay any income tax.
📊 Example:
Sarah is 16 and works at a café on weekends. She earns $15,000 for the year. Because this is below $18,200, Sarah won't pay any income tax. However, her employer may still withhold some tax from each pay. Sarah can get this back when she lodges her tax return.
Good to Know
Even if you earn under the threshold, you should still lodge a tax return to get back any tax that was withheld from your pay.
If you're under 18, special tax rules may apply depending on where your income comes from. However, most young people earning money from a job (employment income) are treated the same as adults and get the tax-free threshold.
Taxed at Normal Rates
Wages from your job, Centrelink payments, your own business income
Taxed at Higher Rates
Investment income from parents, trust distributions, passive income
- •Apply for your TFN online at ato.gov.au - it's free and takes about 28 days
- •The first $18,200 you earn per year is tax-free
- •Without a TFN, your employer must withhold tax at the highest rate (47%)
- •Income from a job is taxed at normal rates for under 18s
- •Always lodge a tax return to get back any overpaid tax
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