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Am I taxed more if I have an ABN

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Hello,

I am in Australia on a working holiday visa (417) I have an ABN as well as a TFN as I do some freelance work and for payment ABN was the suggested method. I have also done some other work this week and have just been paid though payg using just my TFN. I was taxed 32.5% on this pay despite being nowhere near the next threshold and believe I should have been taxed the lower percentage.

Was I taxed so highly because I have an ABN and if so will I be refunded any extra tax I pay at the end of the tax year?

Thanks in advance
Olivia

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Hi @Olivial,

 

Welcome to our Community!

 

If you're here as a working holiday maker and working as an employee, your employer may register with us as an employer of working holiday makers. If so, they will be required to withhold tax at 15% for up to $37,000 based on the working holiday maker tax rates.

 

If your employer isn't registered with us as an employer of working holiday makers, they're required to withholding at the foreign resident tax rates which start at 32.5%.

 

Your employer won't know of your income you earn under your ABN as a sole trader, so this isn't the reason why you were taxed at 32.5%.

 

Income you earn under an ABN (sole trader) isn't tax when you receive the payment and you'll need to include your business income and expenses in your tax return. We'll then calculate your taxable income and calculate how much tax you're required to pay. If there hasn't been enough tax withheld to cover your tax liability you'll have an owing, alternative, if too much tax has been withheld you'll receive a refund.

 

Thanks, JodieH.

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Best answer

ATO Certified

Community Support

Replies 0

Hi @Olivial,

 

Welcome to our Community!

 

If you're here as a working holiday maker and working as an employee, your employer may register with us as an employer of working holiday makers. If so, they will be required to withhold tax at 15% for up to $37,000 based on the working holiday maker tax rates.

 

If your employer isn't registered with us as an employer of working holiday makers, they're required to withholding at the foreign resident tax rates which start at 32.5%.

 

Your employer won't know of your income you earn under your ABN as a sole trader, so this isn't the reason why you were taxed at 32.5%.

 

Income you earn under an ABN (sole trader) isn't tax when you receive the payment and you'll need to include your business income and expenses in your tax return. We'll then calculate your taxable income and calculate how much tax you're required to pay. If there hasn't been enough tax withheld to cover your tax liability you'll have an owing, alternative, if too much tax has been withheld you'll receive a refund.

 

Thanks, JodieH.

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