New Job? Here's Your Tax and Superannuation Checklist

Getting Started: Key Steps You Need to Take

When you start a new job, there are several important steps to complete to ensure your tax and superannuation are handled correctly:

How Your Tax Works as an Employee

As an employee, you must pay income tax on payments you receive from your employer. Your employer withholds tax from your pay and remits these amounts to the Australian Taxation Office (ATO).

The ATO provides tax tables and calculators to help your employer determine how much tax to withhold from your payments. You can also use the tax withholding calculator to check how much should be withheld from your wages.

At the end of the financial year, most employees must lodge a tax return. When lodging, you'll need to include your income (assessable income) and any expenses that can be claimed as deductions. After claiming deductible expenses, you may receive a refund.

What Your Employer Must Do

Your employer withholds tax from your wages on your behalf and, in most cases, pays superannuation contributions to your superannuation account. Your employer uses your tax file number declaration to calculate how much tax to withhold from your pay.

Most employers now report your income, tax and superannuation information at the time wages are paid. This reporting is called Single Touch Payroll (STP).

Your income statement will include tax and superannuation information your employer has reported to the ATO. Most employers must complete data confirmation by 14 July, and will notify you if there's any delay in finalising your income statement.

You'll need to link your myGov account to the ATO to access your income statement. If you don't have a myGov account, you can contact the ATO for a copy.

Some employees receive fringe benefits as part of their salary package. Fringe benefits are non-cash benefits you receive because of your employment—these may be received by you, your spouse, children or other associates. Your employer typically provides these benefits, or sometimes an associate of your employer or a third party provides them under an arrangement with your employer.

Paying Tax on Your Income

You must pay income tax on most sources of income, including:

• Your wages
• Most superannuation payments
• Investment income from rent, bank interest or dividends
• Gains from selling shares, property or cryptocurrency
• Income from your business

The amount of income tax you pay and the tax rate depends on your circumstances and how much you earn. The more you earn, the higher the tax rate.

Your employer and other payers use information you provided on your tax file number declaration to calculate how much tax to withhold. A simple way to calculate how much tax should be withheld from your wages is to use the tax withholding calculator. You can also use the tax withholding tables to calculate the amount to be withheld from your pay.

If you're an Australian resident, the first $18,200 you earn is generally tax-free. You can choose to claim the tax-free threshold when completing your tax file number declaration.

If you receive income from multiple sources—such as a second job or taxable superannuation—you need to tell your second payer to withhold at a higher tax rate. You can select "no tax-free threshold" on your tax file number declaration to inform the payer. If you don't have tax withheld at the higher rate, you may need to pay a tax debt (bill) when you lodge your tax return.

To understand how much tax you need to pay for the entire financial year, see Tax rates – Australian residents.

Australian residents may also need to pay the Medicare levy. This is typically 2% of your taxable income and is in addition to your income tax withholding. The Medicare levy helps fund part of the cost of Australia's public health system, called Medicare.

You'll also need to indicate on your tax file number declaration whether you have any of the following debts:

• Higher Education Loan Program (HELP)
• Student Start-up Loan (SSL)
• Australian Apprentice Support Loan (AASL)
• Vocational Education and Training Student Loan (VSL)
• Student Financial Supplement Scheme (SFSS)

Depending on how much you earn, you may need to repay this debt as part of your income tax.

Superannuation Contributions

Your employer may also be required to pay superannuation contributions to your superannuation account. When you start work, you should take the following steps:

• Choose a superannuation fund your employer can pay contributions into (if you're eligible)
• Ensure your superannuation fund has your tax file number (TFN), which will minimise tax you pay on superannuation contributions
• Confirm they accept contribution payments
• Make it easier for you and them to track your superannuation account

If you're eligible to choose a superannuation fund, you can make your selection using the Standard Superannuation Choice Form. Your employer must provide this form within 28 days of you starting employment.

If you don't choose a superannuation fund, your employer will pay your superannuation to your existing superannuation fund, known as a stapled superannuation fund. A stapled superannuation fund is an existing superannuation account associated with or "stapled" to an individual employee, so it follows them when they change jobs.

If you don't have a stapled superannuation fund, your employer will pay your superannuation into an employer default fund of their choice.

If you change jobs or have multiple jobs, make sure you keep track of your superannuation. Having multiple superannuation accounts may mean you're paying fees you're unaware of, which can reduce your retirement savings. Use the YourSuper comparison tool to compare superannuation products and choose a superannuation fund that suits your needs.