How to Become a Tax Agent
There’s a lot to like about the idea of becoming a tax agent. Some people first consider the idea when they see the great results a professional tax agent can get for individuals, and the difference it makes to their lives. Others (like many members of the IPA) are in it to support small businesses. Tax agent services allow small business owners and managers to concentrate on running their businesses, rather than the details of Australia’s tax rules and regulations. The pay isn’t bad either; government statistics suggest that the full-time average is around $1,519 a week, or $78,988 a year, for the group to which tax agents belong. There are also a number of part time and contract positions advertised at any one time, which may be suitable for those looking to balance tax agent work with other personal and professional pursuits.
Your pathway to becoming a tax agent will depend on where you’re starting from in terms of education and experience. Chat to any practicing tax agent and they will tell you a slightly different story about how they got into their line of work. Some may have graduated from their degree or diploma with no idea that they would end up working as a tax agent. Others decide on the role they want to aim for before they begin studying in earnest. In this article, we’ll include pathways to becoming a tax agent starting from zero education and experience.
Requirements to become a tax agent
In Australia, tax agents must be registered with the Tax Practitioners Board. To get registered, the biggest hurdles are the qualification and experience requirements. That’s what is discussed below. But in addition, it’s important to check off the following:
- At least 18 years of age at time of application
- ‘Fit and proper person’ (integrity, good character, good reputation, no serious tax offences,
- no fraud/dishonesty offences, no current bankruptcies, etc.)
- Appropriate level of professional indemnity insurance (current, or proof that you’ll get it)
- Supporting documents: proper ID (drivers licence, Medicare card and Australian passport are recommended), certificates/academic transcripts, statements of relevant experience from supervisor, etc.
At the time of writing, the application fee is $700, and is not subject to GST. You can do your application online as long as you have the proper documentation. Once you’ve paid and submitted the documents, applications are generally processed within 30 days. Then all you need to do is arrange with the ATO to access their online services for agents, and you’re all set to start working as a registered tax agent!
Education and experience: pathways to becoming a registered tax agent
The fastest potential pathway to becoming a registered tax agent is with a diploma or higher award in accountancy, plus board approved courses. A Diploma of Accounting generally takes around a year, although some students may complete faster, and others may take up to two years. Then the necessary board approved courses generally take around six months to complete (again, potentially shorter, or up to one year).
The applicant must also have at least two years’ relevant work experience within the past five years. This can be done a number of ways. For example, they may be studying for their Diploma whilst working full-time at a tax accounting firm under the supervision of a registered agent. Or they may gain work experience after having completed their primary qualification.
In total, the shortest possible pathway to becoming a registered tax agent is around two years. Of course, you may already be part way along without knowing it if you’ve been studying or working in a relevant role for some time.
Then there’s the tertiary qualifications way. If a person has a degree or post-graduate qualification in accountancy or another discipline, they may simply need to do up to three board-approved courses. The work experience requirement if you’ve got a tertiary qualification is 12 months in the past five years. Including the whole time taken to study at a tertiary level (assuming undergraduate), this pathway takes at least four years.
There are lots of reasons you might choose this pathway. You may already be studying (or recently graduated from) a relevant degree. Whilst most tax agents who take this path have a Bachelor of Accounting, it’s also possible (with the three board certified courses) to use another degree as your primary qualification. For example, commerce, business or law graduates may work in organisations which offer tax law or tax agent services, including consulting and law firms.
The other reason you may choose this pathway is the job opportunities. Some employers require entry-level applicants to have a degree. If you look at current job advertisements for tax agents, you can get a sense of which level of education your employers of choice generally require. On the other hand, some employers prefer a wealth of practical experience – in which case, the pathways above or below may be for you.
It is possible to become a tax agent with no primary qualification (degree or diploma). However, you’ll need eight years of relevant work experience, all obtained within the last 10 years. You’ll also need to take three board-approved courses (in Australian taxation law, commercial law, and basic accountancy principles), or be a voting member of a professional association (like the IPA). To become a voting member generally requires a primary qualification anyway. To put it simply, it’s a long journey. This pathway is generally for people who have been working in associate or support roles in practices which offer tax services for a long time, who want to transition to become registered tax agents in their own right.
One step at a time…
No matter where you’re starting from, your career as a tax agent might not be as far away as you think. The key is to map it out and take it one step at a time. There are also lots of ways to break up the effort so that it doesn’t seem as daunting. For example, online learning options may allow you to study at your own pace, one thing at a time, fitting your learning and assessment around your work and personal commitments. While your study needs to be relatively recent, you may also be able to spread out your study and take breaks in between units, semesters etc. Check out this article for some online learning tips.
If you need a hand to work out your next step, chat to Monarch Institute, our preferred education provider. Monarch’s online courses in accounting and bookkeeping are recognised across Australia and you can compete them at your pace, with full trainer support. Make sure you check the TPB website too, and enquire with the TPB if necessary, for the latest updates and to make sure you’re on the right track. Enrol today or anytime you’re ready.