Banking, taxes and finance in Melbourne

Before you can get paid by your new Melbourne employer, you’ll need to set up your bank account and get on top of how finances work in Australia – here’s our quick guide to opening a bank account in Melbourne, tax in Australia, and other financial commitments while you’re living in Australia:

How to open an Australian bank account for non-residents

Depending on which bank you choose to open an account with, you may be able to open your Australian bank account before you arrive in Melbourne. If you don’t manage to organise it before you leave, it’s an easy process once you’re on the ground. All you’ll need to bring with you is your passport and one other form of ID, such as a bankcard, driver’s licence, birth certificate or student ID.

Since your bank account needs will vary according to your plans, personal finance situation, and dependents, it’s a good idea to do some research before you open a bank account in Australia. Whether you need savings accounts, everyday banking, credit/debit cards, mortgages or other banking products, you’ll find a wide variety on offer, with different fee structures, charges, and interest rates.

Some of the main Australian banks include:

•       ANZ

•       Westpac

•       Commonwealth Bank

•       National Australia Bank

•       St George

•       Bank West

•       ING

•       Bendigo Bank

You’ll also find smaller credit unions and mutual banks that may offer more competitive interest rates or fees but typically have fewer branches (read more about the difference here).

If you need to withdraw cash from your existing bank account on arrival, most banks and automatic teller machines (ATMs) will allow you to withdraw from international bank accounts, provided your bankcard has an international symbol, such as Cirrus or Maestro – be aware that you are likely to incur a fee from your home banks.

Should you decide to transfer money to or from Australia, most banks offer you the option to transfer money to international accounts for a fee, or you can use a service like TransferWise, which will usually be cheaper than going through your bank.

OzForex offers a free service to those conducting foreign exchange to ensure that you have the right advice and expertise – contact OzForex on +61 (0) 2 8667 8090, visit their website, or email info@ozforex.com.au for resources and information.

Paying tax in Australia

As soon as possible, after you arrive in Melbourne, you should apply for your Tax File Number (TFN) from the Australian Tax Office (ATO). If you don’t have a permanent address in Australia, you can give your work address. This process can take up to 28 days, and as soon as your TFN is issued, you should provide it to your workplace so that they can tax you the correct amount (under Australian tax law, if you don’t provide a tax file number, you’ll be taxed at the highest bracket). Non-residents are taxed at a different rate from residents, so it’s best to work out if you’re a resident for tax purposes as soon as possible – your employer’s HR or Accounting department may be able to assist.

Australia’s financial year runs from July 1 to June 30, and individual tax returns are due by the end of October. Your employer will issue you a document known as a group certificate – a summary of your earnings and taxes – at the end of the financial year. You can use this information to fill out your tax return. Tax returns can be filled out either online or on a paper copy (available to order by calling 1300 720 092).

Superannuation

All employees working in Australia are obliged to hold a superannuation (retirement) fund – even temporary residents and working holidaymakers. Your employer will pay 9.5% of your salary into your superannuation fund (usually called ‘super fund’) on your behalf. You can access this fund either at retirement age or if you’re an eligible temporary resident departing Australia permanently, which will incur a tax.

Everyone has the right to select their superannuation fund of choice, or you can use the default superannuation fund of your employer. This will be set up on your behalf when you start working for them (you will usually have some time to provide the details of your personal choice before the first superannuation payment is made). Consumer rights organisation CHOICE offers more information and a guide to help individuals select their super fund.

It’s important that all employees in Australia:

• Know which superannuation fund their employer is contributing to on their behalf

• Retain any superannuation records – you will usually be sent statements twice yearly

• Find out whether they can take their super contributions with them if leaving Australia permanently.

For more information on superannuation, you can call the Australian Tax Office Superannuation information line on 13 10 20 (available within Australia) or go to the Australian Tax Office website.