I have been offered a position in Australia and have a few queires regarding how the tax is calculated. I have asked the question of the proposed employer and recieved the response. (TXT in Blue)

I understand the housing and food deducts as being comparable to the LAFHA allowance. The Super is straight forward even though I would query why it is not applied to the $110k and not the figure less the LAHFA allowances.

Where my big query is is in the rate the tax has been calculated. When I use the ato website simple calculator it produces a 26.5% total tax figure and not the 42.5% as sugested by the employer.

Does anyone konow where the 42.5% might have come from, is it correct?

Any help is appreciated.

Thanks

G'day Bradcat and welcome to the forums. :D

I would imagine that your potential employer has quoted you the tax at the highest rate to cover itself for all circumstances. You should be eligible for a lower rate under certain circumstances - the main one being that you have a Tax File Number (TFN). In English terms, this is similar to having a National Insurance (NI) number. If you don't have one, you get taxed at the highest rate.

Not knowing your full circumstances, I can't comment on which tax rate should apply to you, but if you have read the Australian Tax Office (ATO) website, I'd imagine that the above may help to answer your question.

You should probably check into your eligibilty for a TFN with the ATO.

Cheers,
PR

Thank you for the info. I have been advised by my employer that I will be classified as an resident for tax purposes so should be able to apply for a TFN.

I have visisted the ATO website and used their simple tax calculator which indicates tax at about 26.5%. The question as to where the 42.5% comes from has been asked of the employer.

Thanks for your help. :)