This blog post is aimed at providing clarity regarding the tax procedure pertaining to subclass 457 of Australian migration system. People who are granted the 457 visa to work for a maximum period of 4 years in Australia are unfamiliar with the processes and hence face a lot of difficulties. Moreover, the laws keep changing with time and that adds on to further complications. The employee should be well aware of all the related clauses so that he/ she can reap the maximum tax benefits.
Tax Benefit Plans
We have compiled a list for you for easy and quick reference. However, it is a cumbersome job and it is bes if you seek professional help.
1. Living Away From Home Allowance(LAFHA)
The LAFHA with its two components of accommodation and food can significantly increase the take-home money. However, 457 visa holders are no longer qualified for this allowance.
2. Taxation for offshore income
457 visa holders are exempted from taxation regarding any offshore income. This can prove to be extremely conducive if the temporary resident make investments overseas. No tax is levied on the interest earned from these investments. Hence, proper overseas investments would go a long way in helping people make the most out of their service period in Australia.
3. Medicare Levy
The national health system in Australia is called Medicare and all Australian taxpayers buy term paper are required to pay 1.5% tax as the Medicare Levy over and above the income tax. A certain Medicare Levy Surcharge is also required to be paid by people who do not have a private hospital cover. A 457 visa holder can claim exemption and refund from this tax if he/she has suitable insurance from a private hospital in conformance with visa norms. One can claim this refund at the year end while filing for tax returns.
4. Employers Contribution to Superannuation Guarantee
Australian law mandates all employers to contribute to a superannuation scheme for their employees under the Departing Australia Superannuation Payment (DASP). 457 visa holders are also eligible for this Superannuation Guarantee. Once the 457 visa is expired or cancelled and after the candidate permanently leaves Australia, then this amount can be claimed. The candidate receives this amount after a 35% tax deduction. The claim can be made online at the website of the Australian Tax Office.
It is advisable to consult accountants based in Australia since they are well-informed about every nuance of the Australian tax system for expats. Alternately, you can also seek the assistance of migration agents in Melbourne who, apart from handling all paperwork, also guides you regarding choosing the best value health insurance offered with 457 visa. The latter contributes towards saving significant amount of money as well.
Your search for reliable migration agents in Melbourne ends with us. We are not only adept in arranging all documents, but also can provide you sound advice regarding your health insurance plan and other tax benefit schemes.