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Yes, you can legally start work in Australia without a TFN. There is no law that prevents you from being employed before your Tax File Number is issued.
What happens to your tax without a TFN?
Without a TFN on file, your employer must withhold tax at the top marginal rate of 45%. This is not optional. It is a legal requirement the employer must follow to remain compliant with the ATO.
The 45% rate applies from your very first shift and continues until you provide your TFN. For a working holiday maker who would otherwise pay 15% tax, this means an extra 30 cents is withheld from every dollar you earn during the waiting period.
Does the overpaid tax come back to you?
Yes. The excess tax withheld before your TFN was registered can be reclaimed when you lodge your tax return at the end of the Australian financial year. The ATO reconciles what you actually owed against what was withheld, and refunds the difference to your Australian bank account.
The catch is timing. You do not permanently lose the money, but you lose access to it for months until tax time. For backpackers working on tight budgets, that delay is a real inconvenience.
What is the practical advice?
To minimise the period of higher withholding:
- Apply for your TFN as early as possible, ideally before your first day of work
- If you have already started without one, apply immediately and tell your employer the application is in progress
- Show your employer the ATO confirmation email as evidence
- Provide your TFN and a Tax File Number Declaration form to your employer the moment your TFN arrives
Processing typically takes up to 28 days, so the earlier you apply, the less time you spend losing the extra 32%.
What about cash in hand work?
If you are being paid cash in hand, the TFN question is handled differently because no formal payroll exists. For more on how that works and the tax implications, see our article on cash in hand work in Australia.