Tax planning for people moving to Australia

Residency

Your tax residency determines whether you get the tax-free threshold and whether you pay Medicare levy. Use our Am I an Australian tax resident? quick check, then the official ATO tool for a decision.

Non-resident tax rates

If you're a foreign resident for tax, you don't get the tax-free threshold and you don't pay Medicare levy. See temporary resident take-home and PAYG withholding for non-residents. Working holiday makers get 15% on the first $45,000 — use our working holiday maker tax calculator.

Use the working holiday rates if you are a foreign resident for tax, or an Australian resident who is not a national of a non-discrimination article (NDA) country. Nationals of Chile, Finland, Germany, Israel, Japan, Norway, Turkey or the United Kingdom who are Australian residents for tax purposes are taxed on the same basis as a resident Australian national instead — which means the tax-free threshold rather than 15% from the first dollar. The High Court decided that in Addy v Commissioner of Taxation on 3 November 2021. If that might be you, check your residency before assuming the backpacker rate is your answer. ATO — resident WHMs from NDA countries.

Super when leaving Australia

If you leave Australia as a temporary resident, you can apply for your super (DASP — Departing Australia Superannuation Payment). Tax is withheld at 35% on the taxable component, or 65% if you held a working holiday visa (417 or 462). Use our DASP calculator Australia to estimate your payout.

Foreign income: the temporary resident exemption

Being an Australian resident for tax normally means declaring worldwide income — but if you are also a temporary resident (you hold a temporary visa and neither you nor your spouse is an Australian citizen or permanent resident) most of your foreign income is exempt. You declare income you earned in Australia, capital gains on taxable Australian property, and in some cases employment income for services you performed overseas while a temporary resident. Other foreign income and capital gains on property that is not taxable Australian property do not have to be declared at all.

The ATO's example: Kerrie is a temporary resident who is also an Australian resident for tax. She owns a house in New Zealand. If she is still a temporary resident when she sells it, she does not declare the capital gain in her Australian tax return.

You stop being a temporary resident once you or your spouse become an Australian citizen or permanent resident, and from that point the ordinary rule applies: an Australian resident for tax declares worldwide income, with a foreign income tax offset available for tax already paid overseas. The rules are detailed and the timing matters, so check your own position with the ATO or a registered tax agent before you lodge. ATO — foreign and temporary residents.

When to get advice

Our tools give estimates only. For residency decisions, lodgement, foreign income or complex situations, use the ATO or a registered tax agent.