Compare taxes and see how much you save moving from Texas to Australia
Texas residents pay $0 in state income tax while Australians pay approximately $23,000 in national income tax (plus a 2% Medicare levy) at $100,000 USD equivalent income. Texas's zero state tax advantage is real but partial: US federal income tax (~$17,400 at $100K) still applies to American Texans, giving a combined burden of roughly $17,400 — less than Australia's $23,000. The gap narrows at higher incomes where Australia's rates are more progressive. Australian Americans returning home and Texas energy professionals considering Australian work should factor in Australia's universal Medicare, compulsory superannuation, and the US-Australia tax treaty when planning. Foreign tax credits prevent double taxation for Americans in Australia.
No State Income Tax
Constitutional prohibition on state income tax — Texas residents pay no state-level personal income tax.
Progressive National Tax
Tax-free threshold AUD$18,200, then progressive rates from 16% to 45% at top bracket, plus 2% Medicare levy.
At $100,000 income:
Australia's national income tax is ~$23,000 at $100,000 USD vs Texas's $0 state tax. Texas residents also pay US federal (~$17,400 at $100K) — combined US burden is less than Australian national rates. Americans moving to Australia: foreign tax credits via the US-Australia tax treaty prevent double taxation. Australia's Medicare (universal healthcare) partially offsets the higher tax.
| Income | TX Tax | AU Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $0 | $8,000 | -$8,000 Australia costs more | -$80,000 |
| $75,000 | $0 | $14,000 | -$14,000 Australia costs more | -$140,000 |
| $100,000 | $0 | $23,000 | -$23,000 Australia costs more | -$230,000 |
| $150,000 | $0 | $38,000 | -$38,000 Australia costs more | -$380,000 |
| $250,000 | $0 | $68,000 | -$68,000 Australia costs more | -$680,000 |
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Transfer Money Internationally →Yes — American citizens must file US federal income tax returns on their worldwide income regardless of Australian residency. The US-Australia tax treaty and foreign tax credit mechanism prevent double taxation: Australian income tax paid can be credited against the US federal tax liability on the same income. Because Australian national rates ($23,000 at $100K) exceed US effective federal rates (~$17,400 at $100K), the foreign tax credit typically covers the entire US federal bill, leaving no additional US tax owed on Australian-source earned income. However, Americans with Australian bank accounts, superannuation funds, and investment accounts must comply with annual FBAR (FinCEN 114) and FATCA Form 8938 reporting — a significant ongoing compliance obligation.
Australia's Superannuation system requires employers to contribute 11.5% of an employee's ordinary earnings into a registered super fund (rising to 12% by 2025-26). This is an employer contribution in addition to the agreed salary, not deducted from gross pay. For Americans in Australia, super accumulates as a retirement savings asset. The IRS has historically treated Australian superannuation as a foreign grantor trust, requiring complex reporting on Form 3520 and 3520-A — a significant compliance burden. The US-Australia treaty has provisions addressing superannuation tax treatment, but the interaction with IRS reporting rules is complex. Americans should work with a US expat tax specialist experienced in Australian superannuation treatment from the first year of Australian employment.
Australia's immigration pathways for Americans include several Skilled Migration visas. The Skilled Independent Visa (subclass 189) is a points-based permanent residency visa for skilled workers across hundreds of occupations — Texas energy professionals (engineers, geologists, petroleum specialists) typically score well. The Employer Sponsored visa (subclass 482 temporary skill shortage, or 186 permanent employer nomination) requires an Australian employer sponsor. The Global Talent Independent Program targets exceptional achievers in priority sectors including energy and resources, financial services, and technology. Working Holiday Visas (subclass 462 for Americans aged 18-30 or 35) allow up to 3 years of working travel. Australia does not have a retirement visa, but investors and business owners can explore the Business Innovation and Investment stream.
Yes — Americans who establish genuine Australian tax residency and meet the IRS Physical Presence test (330 days outside the US in a qualifying 12-month period) or Bona Fide Residence test can claim the Foreign Earned Income Exclusion (FEIE) under IRS Form 2555. The 2025 FEIE exclusion is $126,500. However, most Americans in Australia find the Foreign Tax Credit (Form 1116) more advantageous than FEIE, because Australian tax rates ($23,000 at $100K) exceed typical US effective federal rates. The foreign tax credit dollar-for-dollar offsets US tax liability with Australian tax paid, typically eliminating the US bill entirely. Using FEIE instead might result in a higher overall tax liability by forfeiting unused foreign tax credits that could otherwise be carried forward.
Beyond income taxes, Australia and Texas differ significantly on living costs. Housing in Sydney is among the world's most expensive — a suburban family home in a good school zone costs AUD$1.5-2.5 million ($1-1.7M USD). Melbourne and Brisbane are somewhat more affordable but still expensive by Texas standards. However, Australia's Medicare eliminates private health insurance costs — a family in Texas might spend $15,000-$25,000 per year on health coverage. Consumer goods in Australia are 20-30% more expensive than Texas due to geographic isolation and import costs. Childcare in Australia, while expensive, is heavily subsidized through the Childcare Subsidy scheme. Overall, Sydney and Melbourne typically cost 20-40% more than Houston or San Antonio in total annual expenditure, partially explained by the higher income tax.
Texas and Australia share deep ties in the resources and energy sector. Major US oil, gas, and mining companies with Texas headquarters have significant Australian operations — ExxonMobil, Chevron, ConocoPhillips, and Halliburton all maintain substantial Australian workforces, particularly in Western Australia (Perth) and Queensland. Australian liquefied natural gas (LNG) projects and Queensland coal operations frequently recruit from Texas's energy talent pool. Beyond energy, Texas's financial services professionals are sometimes recruited to Sydney's growing banking and fintech sector. Construction engineers and project managers in infrastructure are in demand for Australia's infrastructure boom. Australian-Americans returning home often do so from Texas given the similar frontier, outdoor culture and business environments.
The United States-Australia Double Taxation Convention (1982, updated with protocols) establishes clear rules for taxing different income types between the two countries. Employment income is taxed where the work is performed — meaning Australian employment income is taxed in Australia first. US citizens then claim foreign tax credits to offset any remaining US federal liability. The treaty reduces withholding taxes on cross-border dividends (typically 15% or 5% depending on ownership), interest (10%), and royalties (5%). A US-Australia totalization agreement also coordinates social security taxes, preventing dual coverage for workers subject to both systems. The treaty's saving clause allows the US to tax its citizens as if the treaty did not exist — but the foreign tax credit provisions provide practical protection against double taxation for most employed Americans in Australia.