How to Get the Most out of Getting Your Tax Back

Anyone who has settled in a big city in Australia will know that while the sunshine comes free, pretty much everything else comes with a hefty price-tag. Indeed, according to Forbes’ latest survey, Sydney is the third most expensive city in the world, with Melbourne ranking in at fifth. While the wages may compare well to the UK, the tax rates do not help. The good news is that you can claim your tax back either before you leave the country or at the end of the financial year which is June 30th, whichever happens first.

In Australia tax rates range from between 13 to 29% depending on the type of work and how long you spend in the country. If you are a temporary worker, then this amount will show up on your wage slip and accumulates on a weekly basis. This amount is then forwarded to the Australian Tax Office (ATO) by your employer. 

Now you know where it goes, but how do you apply to get it back? As with most things in life you have a choice; the easy way or the hard way. The easy way is letting someone else do it. Taxback.com.au files over 20,000 Australian tax refunds every year, and is a godsend to all lazy, time deficient backpackers and foreign students. Even if you simply want a quote of how much you are due they offer a free tax calculator for an instant estimation. They also operate on a no refund, no fee basis meaning all you have to do is register and fill in their tax pack then wait. If you expect a higher tax refund and do not mind paying for a bit extra for peace of mind then there is TaxRefund4Travellers. They offer a low fixed fee service and are equipped with an Australian chartered accountant so you can expect your refund to appear promptly.

The second way is to fill in the forms yourself yet this is not as convoluted as you may think. The ATO has provided a service called Etax which can be completed online if you have all the information at hand and should take under an hour. However, as with most things in life it is probably best to leave it up to an expert.

Of course, you will need to provide some information so keep a hold of your wage-slips and most importantly your PAYG (Pay As You Go payment summary). With this paperwork you can lodge a tax return with the ATO to show your earnings and how much tax you paid in the financial year. That leaves the ATO to do their thing of calculating your refund before it is returned to your filthy mitts. 

If you do decide on letting a tax refund company deal with your taxback then do choose wisely as there are plenty around. The first thing you should check is whether they are a Registered Chartered Accountants in Australia, as you would be surprised how many simply are not registered and could leave you short changed.

The next thing you should check is the fee you would be paying. Be highly suspect of percentage fees and when in doubt use a company that offers a flat fee that you are happy with which is usually around $100. Also, check in advance for hidden fees as some charge admin fees and even a fee to transfer the funds into your account.

In some cases you may actually owe the tax office, usually because you have left before spending six months in the country or because you have been taxed on an incorrect rate. If this may be the case then stick with a company that offers a no refund, no fee service as some companies will charge you for the service even if you end up owing the ATO.

Now be realistic, chances are you will not receive every single cent you are due as there are various factors that determine the amount. The first is the length of time you have spent in the country. If you have been in Australia for over six months you are classed as a resident for tax purposes, so make sure you tick the box when filling in job and tax related forms. Secondly there are your gross earnings to consider – and the higher they are, the higher the amount of tax you have paid, and the higher the amount you should be entitled to. The final factor is the rate of tax you have been paying, if any at all, so check with your employer first. Each refund is different and calculated on an individual basis 

Whether you get the maximum amount is largely down to ensuring that you send the correct documentation and that you receive every single expense that you are due. These are costs that have been made while performing your job so make sure you keep those receipts or you have some sort of a written record, even something like a log book can be used as proof.

The expenses you can claim fall under several categories. One is Clothing, so that includes a specific uniform or if much dry cleaning was required as part of your job. If you are a manual labourer this can mean the high-vis vest or the protective jacket you wear on a daily basis, or those boots you bought to work on a building site, it all counts. Travel can also be refunded, but do remember that this is the vehicle you use between jobs while at work and does not include your daily commute. If you travel for work you may also be able to claim for meals and accommodation.

The time it takes for you to receive your tax refund also depends on a few factors. Namely if you had provided all the documentation at the time of your claim, if you put the claim in during the tax year and finally, how long fast your agent can work. Generally if you provided all the relevant documentation and you are not claiming in the middle of a tax year then you should expect to wait around 3-4 weeks 

If for whatever reason you have to leave Australia then do not fear, you can claim from overseas. There is such a thing as the Internet, and with most traveller refund companies offering an online application system it is pretty easy to submit a claim while back at home. Again, even if you close your Australian bank account before your refund arrives most agents can deposit the refund into an overseas bank account but current exchange rates will apply and you will have to pay the transfer fee which is usually around $30.

Whilst that feeling of being short changed may be all too familiar the end of June suddenly feels like Christmas with the anticipation of a four figure bonus from the ATO, be careful how you arrange your taxback to ensure you receive the full amount and when in doubt go to someone you can trust. After that just think about what you can do with all that extra cash.

By Omar Soliman