sonic3829

Can anybody explain the tax and national insurance system in australia. Have been on the Tax web site and have found the tax rates and medi-care levy rates but have found no mention of national insurance or any thing similar.
Does that mean there's no NI down under.

JAJ

Not for employees. Employers have to pay state payroll taxes.


Jeremy

ABCDiamond

The 1.5% Medicare levy (with 1% surcharge for higher earners) is the closest comparison to National Insurance.

If you add UK Tax and NI together, and add Australian Tax and Medicare together, the results each pay for similar services.

brisnick

not forgetting that NI pays for state pension in the uk, and here there's a superannuation contribution of a minimum of 9% of salary (i think).

ABCDiamond

An interesting area
The Australian Aged pension, like the UK one, is paid for out of Tax and Medicare, and is not dependant on the 9% contribution.
Those entitled to it will get it even if they have never paid the 9%.

However, there is an Income and Asset test to the State pension, so that those who are considered well off, will not be much of a burden on the Taxpayer when they retire.
http://www.centrelink.gov.au/interne...ge_pension.htm


This Employers superannuation contribution came into effect in the early 1990's, as a way to force a situation where people would be better off in their old age, and Employers were forced to pay for it !!

ABCDiamond

This thread got me wondering how much the Age Pensions actually are.

The Australian one is currently $244 per week. But only available to those whose other income is under the Income Test.

The basic UK pension is up to £79.60, (depending on previous contributions) but increased by S2P or SERPS. And this is available to everyone regardless of other income.

However, I also saw this: Retirement pension (non-contributory) £47.65 per week.

I'm not sure, but i assume if someone hasn't made any NI contributions, then that's all they get.

I wonder how much I will get from the UK pension when I retire

Jimbo9

You can get a forecast of your UK state pension (basic and any second pension) from http://www.inlandrevenue.gov.uk/cnr/index.htm


As things stand, the UK state pension you receive will frozen at the amount it is when you first receive it if you live in OZ

Jim

Sue from Manchester

Which is an absolute scandal. My parents are part of a pressure group taking the UK Govt to court over this but they wriggle out of it everytime. If you retire to any other country than a Commonwealth one your pension increases each year. If you retire to Oz, NZ, Canada etc it freezes and it has left many people very badly off even though they spent a lifetime paying into National Insurance.
Sorry, get off my soap box now!

kirsty&al

Hello,

You don't have to worry about the 9%. This is the employer's contribution and is equivalent to the 12.8% (on income over the tax free limit) that UK employers pay. This 9% should not come out of your salary, just like the 12.8% doesn't come out of your salary in the UK.

Fortunately, in Oz, the 9% goes into your superfund (pension) whereas in the UK it goes into the general pot.

Regards
Alistair
PS: I have a tax calculator spreadsheet that compares UK and Oz tax (and NI and Medicare). I'll just go and dig it out.

kirsty&al

Hello,

here is the tax comparator I mentioned. It compares a straight-forward PAYE(UK) with a straight-forward PAYG(Oz). If you move away from the straight-forward (e.g. self employed) then the 2 systems become difficult to compare.

You can put your own UK salary into column A if you want. The exchange rate used is 2.5. You can change this on the "rates" tab if you want.

If you are married and your spouse is not working then you will need to change rates->A12 to be 100,000 or a little bit more if you have kids.

I'm not sure the calculator is correct around the area of low Oz wages as there are lots of potential tax offsets that can be claimed.

Regards
Alistair