Welcome to my blog! Here, I provide insights and guidance for South African expats on their financial journey in Australia.
Landing your first Aussie job feels amazing. Then the payslip drops into your inbox and looks like algebra. Here’s the plain‑English tour I give every South African client in week one.
1. Gross pay vs taxable income
Your employment contract usually says $100 000 + super. Only the $100 000 shows up in the Gross earnings column, while the super guarantee sits in its own box. If you do overtime or earn loadings, they’re part of gross pay and therefore taxable.
2. Income‑tax withholding
Australia runs a PAYG (Pay As You Go) system. Payroll software uses the ATO tax tables to withhold an estimate of your yearly tax bill each payday.
- Partial‑year quirk: If you arrive in, say, January, the software assumes you’ll earn the same wage for the whole financial year. Withholding can feel high, but you’ll usually get a refund when you lodge your first return.
- The tax‑free threshold: Tick “yes” on your TFN declaration and the first $18 200 of annual income isn’t taxed.
3. The 2 % Medicare levy
Almost everyone who’s a resident for tax purposes pays the Medicare levy, which funds Australia’s public health system. From 1 July 2024 the low‑income thresholds increased:
Singles: no levy if taxable income is $27 222 or less. The levy phases in once income exceeds this figure (full rate is reached around $34 000 once the ATO tables are finalised).
Families: no levy if combined taxable income is $45 907 or less, plus $4 216 for each dependent child or student.
These figures come from the 2025 Federal Budget papers and replace the older $26 000 / $43 846 thresholds. Couples use the family threshold.
Temporary visa exemption: If you’re on a subclass 482 (Temporary Skill Shortage) visa—or another temporary visa—and not entitled to Medicare benefits, you can apply for a Medicare Entitlement Statement (MES) from Services Australia. This certificate lets you claim a full or partial exemption from the 2 % Medicare levy in your tax return. Keep in mind the exemption is assessed per family member: if your spouse or dependants are eligible for Medicare, part of the levy may still apply. (ato.gov.au, ato.gov.au)
4. Medicare levy surcharge: the private health nudge
Earn above the MLS threshold ($93 000 for singles, $186 000 for families) and don’t hold eligible hospital cover? You’ll pay an extra 1–1.5 % of taxable income. Many expats take out basic cover to dodge the surcharge even if they prefer Medicare for day‑to‑day care.
5. Super guarantee: now 11.5 %
From 1 July 2024 employers must pay 11.5 % of your ordinary‑time earnings into a complying fund. That percentage rises to 12 % on 1 July 2025. Because super sits on top of salary, it never reduces your take‑home pay.
If you’re on a visa that allows temporary residents to claim a Departing Australia Super Payment (DASP), remember that withdrawals are taxed, so view super as long‑term money.
Quick note on salary packaging
You can ask to have part of your cash salary packaged into additional concessional contributions (aka salary‑sacrifice). Up to $30 000 a year can go into super at just 15 % contributions tax, rather than your marginal rate.
6. Anatomy of a payslip (line by line)
| Field | What it means | Tips |
|---|---|---|
| Gross earnings | Wages for the period | Check hours & overtime are right |
| PAYG tax | Withheld estimate of income tax | Confirm TFN declaration lodged |
| Salary‑sacrifice | Pre‑tax super you choose to add | Counts toward $30 000 concessional cap |
| Net pay | What lands in your bank | Match against bank feed |
| SG employer | 11.5 % compulsory super | Should show separately |
7. Three levers to boost take‑home or long‑term wealth
- Salary‑sacrifice into super – A $5 000 sacrifice saves up to $850 in tax for a 37 % bracket earner and compounds inside super.
- Relocation costs reality – Personal relocation expenses aren’t deductible, but if your employer reimburses them the amount is usually FBT‑exempt, so you keep the cash advantage without a tax headache.
- Check SA tax status – If SARS still taxes you via the physical presence test, lodge in both countries and use foreign tax credits to avoid double payments.
Case study: Martin, 29, Sydney
Martin secured a $110 000 package that includes $12 650 SG contributions. By salary‑sacrificing an extra $5 000 he:
- drops taxable income to $105 000
- saves $850 in income tax and MLS
- boosts super balance by $4 150 after 15 % contributions tax
That’s the cost of a return flight to Johannesburg every year, funded by tax the ATO would otherwise keep.
Common expat mistakes
- Ignoring the MLS – a basic hospital policy often costs less than the surcharge.
- No TFN declared – withholding jumps to 47 %.
- Banking on DASP – tax on exit can be up to 65 %. Treat super as a retirement asset.
Final thought
Payslips aren’t just admin; they’re a roadmap. Understand each line once, and you’ll spot every future opportunity to save tax or accelerate your goals.
General advice only; seek personalised guidance for your situation.
