If you’re coming to Australia from overseas to work, you may be classified as either a foreign or temporary resident for tax purposes. Here’s what you need to know:
Foreign Residents
If you’re a foreign resident for tax purposes, you must declare any income you earn in Australia, including:
- Employment income
- Rental income
- Australian pensions and annuities
- Capital gains on Australian assets
As a foreign resident, the following apply:
- No tax-free threshold: You won’t be eligible for the standard tax-free threshold that Australian residents get.
- No Medicare levy: You don’t pay the Medicare levy. You can claim an exemption from the Medicare levy in your tax return for the period you were a foreign resident.
- Australian-sourced interest, dividends, or royalties: You don’t need to declare income from these sources if the paying Australian financial institution or company has already withheld tax.
- Capital gains on your Australian home: If you’re a foreign resident at the time of signing the contract to sell your Australian home, you may need to include the capital gain in your tax return.
Temporary Residents
A temporary resident is someone who:
- Holds a temporary visa
- And is not considered an Australian resident under the Social Security Act 1991 (this includes your spouse if applicable).
As a temporary resident, you are required to declare only:
- Income earned in Australia
- Some income from employment or services performed overseas while you are in Australia as a temporary resident.
You do not need to declare other foreign income or capital gains.
Leaving Australia as a Foreign or Temporary Resident
If you leave Australia permanently and will no longer receive Australian-sourced income (other than interest, dividends, and royalties), you must lodge a tax return before you leave or from outside Australia.
Departing Australia Superannuation Payment (DASP)
If you earned superannuation while on a temporary visa in Australia, you may be eligible for a Departing Australia Superannuation Payment (DASP). This payment can be claimed after you leave the country.
Disclaimer: The information provided in this article is intended for general informational purposes only and should not be relied upon as legal, financial or any other type of professional advice. The content presented here is not tailored to individual circumstances, and therefore, readers should not act upon this information without seeking appropriate professional guidance specific to their unique situation. The author and publisher of this article disclaim any liability or responsibility for any loss or damage that may arise from reliance on information contained in this article.