Australia Cost of Living

Australia Cost of Living



Wages and Income Tax in Australia

Wages

The Australian dollar is the national currency. They have $100, $50, $ 20, $ 10 and $ 5 notes, and $2, $1, .50 cent, .20 cent, .10 cent and .5 cent coins. There are no 1 cent coins. Many places charge something like AU$ 5.99 for a product, just for marketing effect, but in the end you will pay AU$ 6.00.

You can’t do a direct currency conversion to determine what it costs to live in Australia. It’s all relative to how much money you make, your accommodation, what city/town you will live in etc.


Be aware – when you first arrive in Australia, everything will seem unbelievably cheap when you starting converting back in to your old currency. I know this lasted about 6 months for me.

Australia does seem to get more expensive the longer you live here, usually after you’ve begun to work and earn Australian Dollars! Very soon $100 becomes $100 and not forty pounds! There is also a lot of variation in the cost of living in the different regions of Australia e.g. Cost of Living Estimates for Sydney

Financially you will hopefully find yourself in a better position while living in Australia. You may find that your job is probably the same job you did in your country, but you’ll be earning a lot less than you did. Some companies exploit this when recruiting people oversees -so be aware!

Australia Income Tax

All residents have to annually submit an Australian income tax return. Australia has a fairly high rate of income tax. This can either be done yourself using the ATO’s etax software (its a good way to start to learn ) or using a Tax Accountant (they don’t cost much e.g. $150, which can be claimed against the following years income tax).

For more information go to  Australian Income Tax .

Taxable income

Tax on this income

$0 – $6,000

Nil

$6,001 – $25,000

15c for each $1 over $6,000

$25,001 – $75,000

$2,850 plus 30c for each $1 over $25,000

$75,001 – $150,000

$17,850 plus 40c for each $1 over $75,000

Over $150,000

$47,850 plus 45c for each $1 over $150,000

The above rates do not include the Medicare levy of 1.5% (read What is the Medicare levy? for more information).
Here is a simple Income Tax Tool to help estimate your taxable income.

Living Away from Home Allowance

A little known fact is Australia’s Living Away from Home Allowance (LAFHA). Which is designed to meet the needs of an employee who must live away from his/her principal place of residence (local, national, international) to fulfill his/her employment responsibilities. It can result in a significant saving of $000’s for you per year.

This legislation applies to international employees who are in Australia on a working visa. Accountants interested in taking advantage of this benefit can ascertain their eligibility by contacting the Australian Taxation Office (ATO)