Hey all.

So I'm currently in the process of interviewing for a job in Sydney. I'm getting a good feeling about it and am super excited to move. They offered great relocation, pay, super, etc. but I'm getting some differing information from people about the income tax i'll be paying.

The jobs base pay is 70-80k year. From what I can tell from the Australian Taxation Office I'll be paying the following should I get hired:

If I get 75k or less: $2,850 plus 30c for each $1 over $25,000
then, 75,001 or more: $17,850 plus 40c for each $1 over $75,000


Then I see another site that tells me I'll be paying about 42% income tax, yikes!

Any help would be appreciated.

Hi there - assuming you will have a 457 visa or a PR visa of some kind then you will be considered as tax resident and the ATO rates you have quoted are correct.

However the tax rates are about to change on the 1st of July. The 30% tax rate changes to $80k (increased from $75k). The 42% I think is for people who are not considered as tax resident for whatever reason or have not submitted a Tax File Number to their employers.

Thanks for the reply Colin.

Indeed, I'll be there on a 457 visa.

So when the 30% bracket changes to 80K, that means that I'll be able to earn up to 79,999 and only pay $17850 in tax for the whole year?!?! That seems crazy, but hopefully it's true.

That's only 21% income tax. Much better than here in the states.

Hi there - your figures are not quite right - when I replied before I assumed you had the right figures from the ATO - it seems you were looking at the figures for the 2006-2007 tax year - you need to look at the second table for the 2007-2008 tax year which ends on the 30th June 2008.

$1 – $6,000 Nil

$6,001 – $30,000 15c for each $1 over $6,000

$30,001 – $75,000 $3,600 plus 30c for each $1 over $30,000

$75,001 – $150,000 $17,100 plus 40c for each $1 over $75,000

$150,001 and over $47,100 plus 45c for each $1 over $150,000

As I mentioned things change in July. Basically the 30% tax upper threshold becomes $80,000 and the 40% tax lower threshold becomes $80,001.

So if you earn 80k exactly you would pay a maximum tax rate of 30% = total tax of $18,600.

In addition to this you will also have to pay the Medicare Levy which is 1.5% of taxable income = $1200. Are you single or married ?? If you are single you will pay an additional 1.5% Medicare Levy Surcharge unless you have Private Medical Insurance. As you are from the USA you will not be entitled to participate in the Reciprocal Health Care system and will therefore have to get Private Insurance so the surcharge will not be an issue.

So if you earn 80K you will come home with $60,200 PA or $5017 PCM.

This of course is very generic and doesn't take into account any other forms if income you may have or any other taxable deductions you might be entitled to.

Also very big question - have you heard of LAFHA (Living Away From Home Allowance). If you haven't search for the details on this site - there are many posts on the subject ! Also look for the Collet & Co document on the subject - there will be a link to it on some of the posts. Then ask your prospective employer if they can do it for you as part of your contract of employment. Trust me - it's worth having !!

Hope this helps !