Below you will find a quick overview of important facts about living and working in Australia. We have not covered general information on tourist destinations, climate and geography here as there are many excellent and comprehensive sources of information on this on the Internet. The following information is aimed primarily at people who want to work and live in Australia.
For general information on entry requirements, please visit our Australian Entry Requirements Overview page.
However, Australia is not only one of the most prosperous countries in the world in terms of economic size. In the UN’s World Happiness Report, Australia regularly ranks in the top ten. In the “World’s Most Liveable Cities” ranking by the prestigious British The Economist magazine, Australia’s second-largest city, Melbourne, has held first place for seven consecutive years. Adelaide and Perth, two other major Australian cities, also feature among the top 10. The Economist’s “Safe City Index” ranks both Melbourne and Sydney among the top 10 out of 60 large cities worldwide. Few other countries in the world manage to do so well in all categories (prosperity, quality of life, and safety). For good reason, therefore, Australia comes in second place behind Norway in the UN’s World Development Index, which combines a variety of different criteria.
With this in mind, it is no wonder that Australia attracts more immigrants and workers from around the world every year. The Australian population grows by 300,000 to 500,000 people annually, mainly due to the high number of people who immigrate Down Under every year.
The Australian population
The Australian labour market
The Australian working week is 38 hours for a full-time position. Australia currently has a statutory minimum wage of A$18.29 per hour.
Persons who are not Australian citizens or Australian permanent residents usually need a private health insurance for all healthcare-related services. Requirements vary depending on the visa class. Furthermore, some countries have reciprocal healthcare agreements in place with Australia, through which citizens and visitors from these countries are automatically covered by Medicare for specified services when they are in Australia.
The following countries have reciprocal healthcare agreements in place: Belgium, Finland, Italy, Malta, Netherlands, New Zealand, Norway, Ireland, Slovenia, Sweden, United Kingdom
If you are a citizen of one of these countries, please check the respective agreement between Australia and your country regarding conditions and coverage.
The two most important taxes are income tax and goods and service tax (GST).
As in most countries, the Australian tax system is complex and includes a variety of exceptional and special rules. The following overview is intended only as a brief summary. For more information, visit the Australian Tax Office (ATO) website.
The GST is a tax – currently 10% – on most goods, services, and other items sold or consumed in Australia.
Income tax is progressive. This means that the tax rate increases in line with income. The Australian tax year is different from the calendar year, starting on 1 July and ending on 30 June of the following year.
The following table shows the income tax and marginal tax rates for the tax year 2018/2019 in relation to income.
|Taxable Income||Tax on this income|
|0 – $18.200||no tax|
|$18.201 – $37.000||19c for each $1 over $18,200|
|$37.001 – $90.000||$3,572 plus 32.5c for each $1 over $37,000|
|$90.001 – $180.000||$20,797 plus 37c for each $1 over $90,000|
|$180.001 und mehr||$54,097 plus 45c for each $1 over $180,000|
This table shows the tax rates for people who are Australian residents for tax purposes. Individuals who work and live in Australia for long periods or as a permanent residents usually fall into this category. Permanent residents of Australia are normally taxed in Australia on their total worldwide income. If you hold a temporary visa for Australia, you may only be taxed on your Australian income. Foreign residents do not fall under the definition of an Australian resident for tax purposes, and different tax rates apply for them, starting with a tax rate of 32.5% for an income of up to A$90,000.- For the part of income above this amount, the standard tax rates of 37% and 45%, as shown above, apply. Special tax rates apply for working holiday makers, regardless of their residency for tax purposes:
Tax rates for Working Holiday visa holders
|Taxable Income||Tax on this income|
|$0 – $37.000||15c for each $1|
|$37.001 – $90.000||$5,550 plus 32.5c for each $1 over $37,000|
|$90.001 – $180.000||$22,775 plus 37c for each $1 over $90,000|
|$180.001 und mehr||$56,075 plus 45c for each $1 over $180,000|
Tax for businessesThe taxation of companies depends on the legal form as well as the size of the company. Sole traders and partnerships are taxed at the level of the individuals’ respective personal tax rates. The current corporation tax rate for corporate entities is 30%, which is reduced to 27.5% for companies with less than A$20 million in annual revenue. Small businesses also enjoy additional tax benefits (for example, an immediate write-off of fixed assets up to a value of A$20,000.-). The individual Australian states levy a payroll tax on companies, based on the wages paid by these companies. The amount varies from state to state. There are also exemptions, with small businesses often excluded from this tax. Additional state and territory taxes and stamp duties are payable on the value of real estate and real estate transactions.
International tax agreementsThe international tax agreements are especially important for migrants and expats in Australia who receive an income from their home country. To avoid double taxation of income, Australia maintains tax treaties and double-taxation agreements with a number of states. For this purpose, these agreements define which income is taxable in which country or how taxes paid in one country can be offset from tax liabilities in the other country. To find out whether your home country has a tax agreement with Australia, see the current list of income tax treaties, which can be found on the ATO website.
The Australian pension system is based on three pillars: a tax-funded Age Pension, superannuation, a compulsory funded pension scheme, and additional private savings.
The tax-financed Age Pension is means-tested; i.e., it is only paid if the retiree’s total income does not exceed a certain amount and the total value of the retiree’s assets does not exceed a certain threshold. The maximum annual Age Pension is currently A$23,598.- for singles and A$35,573.- for couples.
The largest and most important pillar of the Australian pension system is superannuation. This is a fully funded pension system. Australian workers can choose from a variety of superannuation funds that follow different investment strategies. All employers are required to pay an amount equal to at least 9.5% of gross salary into the employee-nominated fund. This contribution rate is to be gradually raised to 12% in the coming years.
There is no mandatory employee contribution, but employees can voluntarily make additional contributions.
When moving to Australia as a migrant or temporary visa holder, it is advisable to check the situation regarding your Age Pension claims from the countries you have worked and lived in before.
If you have worked in Australia and your employer paid super contribution on your behalf into your super funds, you can apply to have this super paid out to you as a departing Australia superannuation payment (DASP) when you leave. Some conditions apply (e.g., that your visa must have expired).
Australian superannuation funds currently manage over A$2 trillion in wealth to fund the pensions of the Australian population.
Doing business in Australia
Setting up a partnership with several business partners is similarly uncomplicated. However, a partnership is not itself a legal entity, rather a structure in which the individual partners conduct a common business and distribute income or losses between themselves. Furthermore, all partners have unlimited liability for obligations under the partnership.
Founding a company as a separate legal entity is also straightforward and requires no minimum capital contribution. The most common form of company is the proprietary limited company (Pty Ltd). Under this business structure, the number of shareholders (not including employees of the company) is limited to a maximum of 50. A company with more than 50 external shareholders is classified as public. The liability of the company’s shareholders is limited to the value of shares. The shareholders are liable only in terms of their capital contributions and not their private assets. A Pty Ltd company is managed by its directors, as appointed by the shareholders. At least one director must be resident in Australia. The registration fees for a proprietary company amount to a few hundred Australian dollars. The registration itself can be carried out online within a few hours. In addition, there are a number of other legal forms such as trusts, which can be considered an appropriate legal structure.
Overall, Australian corporate and tax law is very founder-friendly and facilitating for small businesses. As an Australian permanent resident with working rights, you have no limitations regarding founding, owning, and managing your own business and company. In addition, special visa classes exist for experienced business persons, founders, and investors, which encompass the required residence and working rights for your project. Talk to us and tell us about your project.