So your teenager has landed his or her first job - well done! Whether it's a casual job over the summer or a part-time job during the semester, it’s a great opportunity for learning independence, self-reliance, and other valuable skills in preparation for adulthood. Starting a first job can be scary for a young person, and you as a parent can support your teen by ensuring all the practical stuff - like tax, bank accounts, and super - is taken care of before they start. Here are some tips to help your teen get ready before they start work.
Helping them understand the workplace environment
The working world could seem unfamiliar or even intimidating to a teenager who's starting their first job, so have a chat to your teen about the workplace. Explore topics like professional etiquette, employer expectations, and presentation.
- Presentation - If your teen has secured a job, then he or she probably already understands the importance of professional presentation. Whether it's a retail, hospitality, or another type of position, make sure they understand the presentation standards required. For example, they might be expected to wear a uniform or fulfil a specific dress code.
- Professionalism - Talk to your child about dealing with supervisors, co-workers, and customers. Ensure they're aware of potential challenges like angry customers and difficult coworkers, and how they could handle situations like these with professionalism.
- Employer expectations - Help your teen understand the employer-employee relationship as well as their rights and obligations as an employee. Check they're aware of things like bullying, safe work environments, and pay and conditions.
Assist them with financial and tax issues
There’s all things we wish we’d known when we first entered the workforce. Your teen could benefit from your advice on things like budgeting, tax, bank accounts, and super.
1. Budgeting
Since your teen will start earning their own money, it's a good time to talk about budgeting. Guide your teen on basic budgeting skills, including tracking, projecting, and reviewing their income, savings, and expenses. Explore budgeting tools like apps, spreadsheets, or software and see which one they feel most comfortable using. Talk to them about setting financial goals like saving money for purchases, and how to spend their money wisely on needs versus wants.
2. Bank accounts
Your child should have a bank account so they can receive their pay. If your teen doesn't have a bank account, now's the time to help them set one up. Your teen should be able to open a bank account in their own name. Along with a transaction account, your teenager might also want to open a high-interest account for their savings.
When they’re choosing an account, help them compare features like fees, interest rates, and minimum and maximum account balances. Bank accounts can differ considerably on these features and terms. Basic accounts with no account-keeping fees and no minimum deposit amounts are popular with teens starting work.
3. Tax file number and tax
Your teen will need to provide their employer with a tax file number (or the employer might have to withhold some of their pay), so make sure he or she has applied for one well before they're due to start work. Check they understand personal income tax and how it works, and how they can work out whether or not they need to lodge a tax return.
If they have a savings account and earn interest from it, ensure they understand they might need to pay tax on the interest and declare the interest for tax purposes. This will depend on their age, how much interest they earn, and other factors.
4. Superannuation
Check your teen understands how superannuation works, and their entitlements. Talk to them about why getting started on super early is important, even though retirement might seem far off. Talk to them about government incentives like the co-contribution which they could benefit from as a low-income earner.
It's also vital to check your child's super fund to make sure the features match their needs. With teens who tend to maintain a low super balance - a key issue is to make sure their earnings aren't being eroded by high super fund fees. You could help them find a super fund designed for students and young people - like Student Super - as these can come with discounted fees for low balances.
As your teen child gets started in the workforce, you can support them by providing general knowledge about the workplace as well as helping them with practical matters relating to managing their finances. Make sure they understand the workplace environment and their rights as an employee. They'll also benefit with your help on things like superannuation, tax, and bank accounts. With your support, your teen's foray into the working world could be a great success.
At Student Super, we understand that starting their first job can be a complex process. However, when it comes to setting up their first superannuation account, we have all the services here to help them. Get started today.
