The tax system in Australia: A complete guide for expats

Understanding your tax obligations in Australia is essential. Pretty much anyone living and working in Australia must take action at tax time, even if your employer withholds income tax, or if you don’t earn enough to be required to pay income taxes. Navigating tax filing and payment isn’t often fun, but knowing upfront what you need to report, as well as deadlines and payment mechanisms can make the process less stressful.

This guide covers the basics of the tax system in Australia for expats. It’s not a substitute for professional, tailored advice from a tax advisor – but our guide covers core taxes to think about, as well as resources to learn more. Let’s dive right in.

Understanding the tax system in Australia

Tax in Australia is managed by the Australian Taxation Office (ATO). Most people working in Australia need to take some action to submit their taxes annually. Even if you’ve not earned enough to hit the tax thresholds, you’ll need to submit a non-lodgement advice.

The Australian financial year is from 1 July to 31 June. Tax filing must usually be complete by 31 October of the year in question. To file your taxes you must have an Australian Tax File Number (TFN). This allows you to get access to ATO digital services to complete your tax filing, get support and make payments.

Personal income tax (PIT) in Australia is a progressive tax, with different rates for resident, non-resident and working holiday tax payers. The PIT rates for Australian residents in 2025/6 are as follows:

Taxable income	Tax rate
Up to 18,200 AUD	Nil
18,201 AUD – 45,000 AUD	16c for each $1 over $18,200
45,001 AUD – 135,000 AUD	$4,288 plus 30c for each $1 over $45,000
135,001 AUD – 190,000 AUD	$31,288 plus 37c for each $1 over $135,000
190,001 AUD or more	$51,638 plus 45c for each $1 over $190,000

In addition to PIT there is also a Medicare levy of 2%. This is similar to social security taxes which apply in many countries. Low earners may be exempt but higher earners who do not have their own eligible private health insurance may be asked to pay more.

Some offsets and other tax treatments are available, depending on the situation of the individual – making it helpful to get professional advice to look at your own unique tax situation when you move to Australia. The ATO also offers some handy tools like the tax calculator (Australia) which can help you figure out the amount you’ll pay.

Other taxes which are used in Australia include regional property taxes and stamp duties, business taxes including corporate and fringe benefit taxes, and a consumption tax called GST (similar to VAT in other countries).

Tax is complicated – and especially so if you’re an expat as you may have other duties and liabilities in your home country as well as Australia. Get professional advice to make sure you submit and pay taxes in the correct way, based on your unique situation.

Who pays tax in Australia?

Australian residents are likely to need to pay tax on worldwide income, while non-residents usually pay tax on Australian sourced income only. Different tax rates apply depending on whether you’re a resident or not. You’ll need to complete a tax return for Australia, even if your income is underneath the threshold for tax withholding – although in this case, the information you provide is in the form of a non-lodgement advice rather than a full return.

The definition of residency in Australia relies on several different factors, and each case is taken individually. Generally you’re a resident if you stay in Australia for more than 183 days in the tax year and if you have a domicile in Australia. In some other situations you may be deemed to be a temporary resident in Australia.

Tax as an expat can be complicated as you might find you owe taxes in more than one country. In this case, double taxation treaties may apply which stop you from paying tax on the same income twice.

If you need to pay your Australian taxes from abroad – or if you’re in Australia and paying tax in your home country – Wise could help. Wise offers low cost, secure transfers to and from many countries globally, with mid-market exchange rates and fair, transparent fees which decrease when you send higher amounts.

How do taxes work for expats in Australia?

As an expat in Australia you’ll need to pay tax based on your residency status. If you’re not considered an Australian tax resident, you’ll pay non-resident rates on the income you’ve sourced from Australia only. Non-residents do not benefit from a tax free allowance, and pay 30% – 45% progressive taxes depending on their income amount.

Do I need a tax ID number in Australia?

Yes. You need a tax ID number in Australia, called a tax file number (TFN). You’ll need this number if you get a job, apply for government payments, or get an Australian business number (ABN). The process to get your TFN depends on your nationality and residence, but there are various different ways to apply from inside or outside of Australia.

You can use the Australian government tools to get a tax file number, or find your number if you already have one.

Types of tax in Australia

There are various different types of tax in Australia which may not be familiar to you as an expat. This guide doesn’t cover every possible tax – so you’ll also want to do your own research or get the support of a professional tax advisor to make sure you understand all possible taxes based on your own situation.

All details correct at time of research – 15th October 20205. Tax rates and information do change from time to time, so check the latest details on the ATO website or via your tax advisor.

Australian income taxes

Australian income taxes are progressive, with a tax free element available for resident tax payers. Residents pay on a sliding scale of 0% – 45% depending on income, while non-residents pay 30% – 45% progressively.

If you’re paying your Australian income tax from abroad, consider using Wise to make your transfer, using the mid-market rate and low, transparent fees. Wise payments arrive quickly and can be set up online or in the Wise app – making tax payments straightforward and stress free.

Australian social security

There’s not a specific Australian social security tax, but there are a couple of payments which fall into this bracket.

You’ll pay a Medicare levy which is 2%, used to fund some of the costs of Australia’s public health system. This is waived for some low earners, but people earning high amounts who choose not to pay for private health insurance might have to pay additional Medicare charges. This is known as the Medicare Surcharge levy and adds 1% – 1.5% to your bill, depending on the situation.

There’s also employer contributions to Superannuation plans, paid into retirement savings accounts (RSAs). This is paid by the employer, but employees can also choose to contribute which is often tax effective and used as a means of paying for a pension later in life, or in some cases, for buying a property.

Corporate tax

Corporate income tax in Australia is usually 30%, reduced to 25% for eligible small businesses. If the company is considered to be resident in Australia it pays tax on worldwide income but non-resident companies may only pay tax on locally sourced income.

Other taxes may also apply if you run a business in Australia – get professional advice to explore those which may apply to your specific business.

GST in Australia

GST (goods and services tax) is the consumption tax in Australia, which may also be called VAT (value added tax) in other countries. GST is set at 10% and payable on many goods and digital products or services. Exemptions apply on things like many foods, medical and health supplies and education supplies.

Property tax in Australia

Property tax in Australia is localised, with states, territories and municipal councils all able to apply their own rates. These rates are based on the value of the land owned, and there are also varying treatments for foreign buyers which depend on the state. Exemptions to property taxes may also apply – for example for a primary residence. As property tax is quite a complex area, you’ll need to get dedicated advice on your own situation to know what needs to be paid.

Inheritance and estate tax

There’s no inheritance tax in Australia, and there are no specific estate taxes. Instead, if you make a gain from an inheritance, you may need to report it as income alongside the income from other sources such as salary and gains made when selling assets. The standard income tax rates for Australia then apply.

Capital gains tax and tax on investment income

Capital gains tax (CGT) in Australia applies on investment income from disposing of assets like property, shares and crypto. CGT is not a separate tax to your income tax. This means that the progressive tax bands used for income tax apply here.

If you make a gain during the tax year you’ll need to report it along with income from things like your salary, and pay tax on the full taxable amount according to the Australian tax rate the income falls into.

Glossary of Australian tax terminology

Name	Description
Tax file number (TFN)	Australian tax ID number
Medicare Levy	Australia’s social security tax which covers some public health costs
Medicare Surcharge Levy	Higher rate of Medicare contribution payable by high earners in specific situations
Superannuation	Employer and employee contributions paid into retirement savings accounts (RSAs), for pension use and in some cases buying a home
Goods and Services Tax (GST)	Australia’s consumption tax, payable on many goods and services

How to file taxes in Australia as an expat

The ATO makes the process of filing for taxes fairly straightforward, but there’s some action needed from almost everyone living in Australia to check, complete and submit the tax return or inform the ATO that no return is needed as no tax has been withheld.

Here’s an overview of how to file taxes in Australia as an expat:

Step 1: Check your residency for tax purposes

As an expat the first step is to make sure you know if you’re a tax resident in Australia. This is not necessarily related to your residency for visa purposes. You may be considered a tax resident even if you’re not a permanent resident of Australia for example. Different tax treatments apply to resident and non-resident tax payers, so double check which rules to follow.

Step 2: Get a TFN

If you don’t have one, you’ll need to apply for your tax file number. This is a step you only need to take once – when you have your TFN it will remain the same for life. Get your TFN on the Australian government website.

Step 3: Log into the ATO website to view your prefilled forms

The ATO will pre-fill your tax return with some information from your employer, which will then be available in late July for your final return. The tax year ends on June 31, and you’ll have until the end of October to submit your final form, giving plenty of time to check and complete your paperwork

Step 4: Add any additional information needed and check over

The ATO may not have included all forms of income on your prefilled return. Investment or capital gains income is not likely to be shown for example. You’ll have to make adjustments to your calculation to make sure you’ve captured everything required. And double check all the information the ATO used is accurate.

Step 5: Submit to the ATO and make any required payments

Before 31 October you’ll need to submit your return online on the ATO website, and will be informed of any required payments or likely tax refunds.

Tax fines and penalties

The ATO may charge interest and penalties if you fail to report taxes correctly, or fail to make payments needed. Here are some important things to know:

• General interest charge (GIC) – applies on any unpaid or underpaid tax amounts, with rates which are recalculated quarterly
• Shortfall interest charge – applies if you have to adjust your return after submission, changing your liability
• Penalties – penalty unit fees of 330 AUD apply if you submit an incorrect return – the number of penalty units depend on the severity of the error – 20 units for unintentional errors which do not lead to a shortfall for example
• Shortfall penalties – if you make errors which lead to paying too little tax, you’ll be charged a penalty which is an additional percentage of the amount owed, from 25% for accidental errors to 75% for intentionally providing inaccurate information

Double taxation agreements

Australia has taxation treaties with many major countries, including the US, UK and many countries in Europe. Double taxation agreements are intended to prevent individuals needing to pay tax twice on the same income. This may happen if you’re taxed on worldwide income by 2 or more countries. If the countries which have a claim to tax from you have a double taxation agreement there will be an arrangement in place to make sure you pay tax only once and are exempt in the other country.

If you owe tax in another country get professional advice to see if this applies. And if you need to send money abroad to cover international tax obligations, check out Wise as a simple and low cost way to make secure payments all over the world.

Tax avoidance and evasion in Australia

Tax avoidance – also called tax planning – involves using legal approaches to minimise the amount of tax you need to pay. Tax evasion on the other hand is always illegal and involves deliberately evading taxes which you are obliged to pay.

Legal methods of tax planning in Australia include paying voluntary superannuation contributions, which is often a tax effective approach to building funds for later use such as buying your first home. There are also other more complex options – but you’ll need to take professional advice to ensure any approach you take is suited to your situation, including analysing the risks involved.

Tax advice in Australia

Getting tax advice as an expat in Australia is likely to help give you peace of mind and navigate an unfamiliar and complex system.

The ATO has various resources including Tax Help offering support for people earning under 70,000 AUD to submit their tax return, and details of National Tax Clinics which you can learn about on their website. For individual advice you might want to search for an appropriate registered tax agent on the Tax Practitioners Board website.

Useful resources

• Australian Taxation Office (ATO) – landing page for the ATO with navigation to all other specialist pages
• Australian government – What to do at tax time, on the government’s public facing tax portal
• Australian government – Get a tax file number, or find your number if you already have one
• ATO – Tax rates for Australian residents
• Australian government – Tax information for businesses
• PwC – Australia tax summary and overview prepared by consultancy PwC
• ATO simple tax calculator – Helps to work out tax owed on your taxable income for the full income year.
• ATO income tax estimator – Fuller tool to help to work out your tax refund or debt estimate
• ATO – Tax and Super as a visa holder in Australia
• ATO Tax Help – ATO support for people earning under 70,000 AUD to submit their tax return
• National Tax Clinics – Tax support and advice
• Tax Practitioners Board – Helpful website to find a registered tax agent