Tax residency
Whether Australia taxes you on worldwide income or only Australian income — decided by your circumstances, not your visa.
Australian tax residency is separate from citizenship and immigration status. A foreign citizen on a temporary visa can be a tax resident, and an Australian citizen living abroad can be a non-resident.
Residents are taxed on worldwide income and receive the tax-free threshold and the CGT discount. Non-residents are taxed only on Australian-sourced income, get no tax-free threshold, and pay from the first dollar at higher rates.
The tests turn on where you actually reside, your domicile and permanent place of abode, how long you are physically present, and where your assets and family are. No single factor decides it, which makes borderline cases genuinely difficult.
Why the distinction is expensive
On $80,000 of Australian income, a resident gets $18,200 tax-free. A non-resident pays from the first dollar at the foreign resident rates, producing a materially larger bill on identical earnings.
The bit people get wrong
Leaving Australia can trigger a deemed disposal of certain assets for CGT purposes, taxing you on gains you have not actually realised. Getting advice before departing is far cheaper than fixing it afterwards.
Common questions
Does the 183-day rule decide my residency?
It is one test among several, not the whole answer. Being present for more than half the year points towards residency, but your usual place of abode and intentions also matter.
Do working holiday makers get the tax-free threshold?
No. Working holiday makers are taxed under a separate schedule from the first dollar, regardless of how long they stay.
Can I be a tax resident of two countries?
Yes, and it happens often. Australia's tax treaties contain tie-breaker rules to decide which country has primary taxing rights, which is why cross-border cases usually need professional advice.