Australian tax return (Income Tax Return) deadline: 31 October (self-lodgement) or later with a tax agent. Australian residents taxed on worldwide income at 0–45% progressive rates plus 2% Medicare Levy. Non-residents pay 32.5% on first dollar of Australian-source income (no tax-free threshold). Key expat issue: residency determination — Australia's rules are facts-and-circumstances-based.
At a glance
Key Facts
Tax Year
1 July to 30 June (Australian Financial Year — FY2025 = 1 July 2024 to 30 June 2025)
Filing Deadline
31 October (self-lodgement via myTax); registered tax agent: typically February–May of the following year
Resident Tax Rates
0% on first $18,200 (tax-free threshold); then 19%/32.5%/37%/45% progressive + 2% Medicare Levy
Non-Resident Tax Rates
32.5% from $0–$135,000; 37% on $135,001–$190,000; 45% above $190,000; no Medicare Levy; no tax-free threshold
No Inheritance Tax
Australia has no inheritance tax or estate duty; superannuation has special death benefit tax rules
Introduction
Australia's tax system operates on a July-to-June financial year, with most individuals filing their Income Tax Return between July and October. For expats — both those arriving in Australia and Australians living abroad — the residency determination is the most critical issue: Australian residents are taxed on worldwide income; non-residents are taxed only on Australian-source income but at less favourable rates with no tax-free threshold.
This guide covers Australian tax residency tests, tax rates for residents vs non-residents, the myTax online filing system, key deductions, and how foreign income is handled on an Australian return.
Section 01
Australian Tax Residency Rules
Australia's tax residency determination is one of the most legally complex in the developed world. Unlike the UK (Statutory Residence Test) or US (days-based with specific rules), Australia relies on four overlapping tests with significant legal uncertainty:
The Resides Test
The primary test: do you 'reside' in Australia? Based on facts and circumstances including: physical presence, intention, family and business ties, maintenance of Australian home, social life and assets. There is no fixed day count — courts have found people resident with only a few months' stay, and non-resident despite spending 200+ days in Australia.
Domicile Test
If your domicile (place of permanent home) is Australia, you remain Australian resident unless you have a permanent place of abode outside Australia. This is the key test for Australians who leave — you remain resident unless you can demonstrate a permanent home established abroad.
183-Day Test
Present in Australia for more than half the income year (183+ days): automatically resident unless usual place of abode is outside Australia and you have no intention of taking up residence.
Superannuation Test
Commonwealth superannuation fund members are always Australian residents for tax purposes.
Practical implication for expats:
Australians moving abroad often struggle to demonstrate non-residency — maintaining Australian bank accounts, investments, a family home, or returning for holidays can all be used by the ATO as evidence of continued residency. The ATO has recently issued stricter guidance. Many Australian expats should get professional residency advice before filing.
Section 02
Filing Your Australian Tax Return: myTax
myTax — ATO Online Portal
myTax is the ATO's free online filing system, accessed via myGov. It pre-fills much of the return from employer payment summaries, bank interest data (received from financial institutions), and government payment records. For simple returns (one employer, Australian bank interest), myTax is often quick and accurate. For expats, pre-filling is less complete — foreign income, overseas assets, and non-resident withholding details must be manually entered.
Who Can Use myTax
Most Australian residents can use myTax. Non-residents with only Australian-source income can also use it. Non-residents with complex cross-border affairs or recent residency changes may need a registered tax agent.
Key Schedules for Expats
Foreign Income: Declared in the return under 'Foreign income, assets and entities' — includes foreign employment income, foreign pension, foreign rental, foreign dividends
Foreign Tax Offset: Credit for foreign taxes paid, limited to the Australian tax on the same income
Capital Gains Tax: CGT event must be reported in the year the contract is signed (not settlement for property); no CGT on assets held before becoming Australian resident if non-resident before that date
Superannuation (Super)
Employer Super Guarantee contributions (11.5% in 2024/25) are not included in your taxable income — they are taxed at 15% inside the fund. Super cannot be accessed until preservation age (60 for most). Expats leaving Australia permanently can claim their super as a Departing Australia Superannuation Payment (DASP), taxed at 35% (65% for Working Holiday Maker visa holders).
Section 03
Foreign Income on an Australian Tax Return
If you are an Australian tax resident, worldwide income must be declared. Key categories:
Foreign Employment Income
Employment income earned overseas while an Australian resident is fully taxable in Australia. Section 23AG exemption (pre-2009 rules) no longer broadly applies. If you paid foreign tax on the same income, claim a Foreign Tax Offset. Convert all income to AUD using the exchange rate at the time of receipt (or the ATO annual rates for convenience).
Foreign Rental Income
Declare on the return; claim Australian-style deductions (interest, depreciation, repairs, management fees). Foreign rental losses can be offset against Australian income. Foreign taxes paid on the rental income are creditable up to the Australian tax on that income.
Foreign Pensions
Foreign government pensions: usually taxable in Australia (depending on treaty). Some countries' pensions are partially or fully exempt under double tax agreements. The Australia-UK treaty provides that UK pension income is taxed only in Australia for Australian residents.
Controlled Foreign Company (CFC) and Foreign Investment Fund (FIF) Rules
Australian residents with interests in foreign companies (>10% interest in a CFC) or foreign investment funds may be required to include deemed income from those structures on their Australian return annually, even without distributions. These rules are complex — seek professional advice if you own shares in a non-Australian company.
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Do Australian expats living abroad need to file a tax return?
It depends on whether you are Australian resident for tax purposes. If you have successfully established non-residency (permanent home abroad, severed Australian ties), you only need to file an Australian return if you had Australian-source income — typically rental income from Australian property, Australian dividends, or employment income from Australian employers. If the ATO still considers you an Australian resident (common for Australians working on short-term overseas contracts who maintain Australian home, spouse, and bank accounts), you must file and declare worldwide income. The ATO has been increasingly aggressive about asserting continued residency for Australians abroad. If you receive any Australian-source income, it is safest to file. Filing a nil return can also be useful to start the clock on the ATO's assessment period.
Q
What are Australian tax rates for non-residents?
Australian non-residents (including foreign nationals and Australians who have successfully established non-residency) pay: 32.5% on Australian-source income from $0 to $135,000; 37% on $135,001–$190,000; 45% above $190,000. There is no tax-free threshold and no Medicare Levy for non-residents. This compares unfavourably to resident rates (0% to $18,200; 19% on $18,201–$45,000). Non-residents also face withholding taxes on Australian investment income: 30% dividend withholding (reduced by treaty — e.g., 15% under US-Australia treaty); 10% interest withholding; 30% royalty withholding. Non-residents cannot claim the tax-free threshold, low-income tax offset, or most other offsets available to residents.
Q
How does the Australian Foreign Tax Offset work?
The Foreign Tax Offset (FTO) allows Australian residents to reduce their Australian tax by the amount of foreign income tax paid on the same income. Calculation: (1) Convert foreign tax to AUD; (2) FTO is limited to the Australian tax on the foreign income portion of your total income — you cannot use FTO to reduce Australian tax on Australian-source income; (3) Excess FTO cannot be carried forward — use it or lose it each year. Example: AUD income $50,000 (20% effective rate = $10,000 tax); Foreign income $30,000 (foreign tax paid $9,000). Australian tax on foreign income portion: approximately $9,750 (32.5% marginal rate). FTO is limited to $9,000 (actual foreign tax) since it's less than the $9,750 limit. US-Australia tax treaty allows the FTO for US taxes paid — US citizens in Australia can often reduce their Australian tax bill substantially through FTO.
Q
When do I need a tax agent for my Australian return?
A registered tax agent (BAS agent or tax agent registered with the Tax Practitioners Board) is recommended if: (1) you have recently changed residency status (arrived or departed mid-year); (2) you have foreign income from multiple sources; (3) you have a CFC or FIF interest; (4) you have a complex capital gains event; (5) you have real property with depreciation claims; (6) you receive the DASP (Departing Australia Superannuation Payment). Tax agents also get a lodgement extension — their clients typically have until May or June of the following calendar year to file (vs 31 October for self-lodgement). For US citizens in Australia: using a tax agent with experience in US-Australia cross-border tax is essential, as the interplay of Australian residency, US citizenship-based taxation, and the tax treaty is highly complex.
Q
What is the Departing Australia Superannuation Payment (DASP)?
When a temporary resident (working visa holder) permanently leaves Australia, they can claim their superannuation savings as a Departing Australia Superannuation Payment (DASP). Eligibility: you must have held a temporary visa (not permanent resident or citizen), departed Australia, and have your visa cancelled or expired. Tax rate: 35% on the taxable component (65% for Working Holiday Makers). The application is made online through the ATO after departure. For permanent residents and citizens, super cannot be accessed until preservation age (60) and retirement. Note: if a temporary resident fails to claim DASP within 6 months of departure, the ATO may sweep unclaimed super to the ATO's Superannuation Holding Accounts — still claimable but requires filing with the ATO directly.
Disclaimer:This guide provides general tax information for educational purposes only. Australian tax residency rules are highly fact-specific and have been subject to recent ATO review and court cases. Foreign income treatment, CFC/FIF rules, and superannuation regulations are complex. Always consult a registered Australian tax agent before filing.