Applying For A Tax File Number

This post is presented in partnership with McDonald's.

A Tax File Number (TFN) is a number which the Australian Tax Office uses to uniquely identify an individual who may be required to pay tax on the income they've earned or received.

If you intend to work and don't already have a TFN, you'll need to apply for one from the Australian Tax Office (ATO).

Employers are required to deduct tax from each employee's earnings and send that tax to the ATO. After 30th June each year, organisations then issue each employee with a Payment Summary that confirms:

• the employee's earnings within the twelve month period from 1st July to 30th June (also known as a financial year); and
• the total amount of tax that has been withheld from their weekly wages and sent to the ATO during the same period.

Employees each then complete and submit a tax assessment and employees then receive either a tax return (if they've paid more tax than they're required to), or in some cases the ATO asks employees to pay a tax debt (where they haven't paid enough tax.)

To ensure employees are taxed correctly, individuals should include their TFN when they fill out an Employment Declaration Form upon commencing a new job. In cases where a new employee doesn't provide their employer with a TFN, the employer is require d to deduct more tax, which means the employee takes home less pay!

Article adapted, with thanks to McDonald's.