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Residency for Income Tax Purposes

What does that mean?

One of the main criteria of being eligible for tax back is that you need to first be deemed a Resident for Australian Income Tax Purposes.

The Australian Taxation Office has a great tool to help you determine whether or not you can be classified as a Resident for Australian Income Tax Purposes.

Determination of Residency

The short story is that a foreigner to Australia is effectively seen as a Non Resident for Australian Income Tax Purposes however what it is they actually do whilst in Australia will actually determine whether or not this sticks for the entire time they are here, or whether or not they are actually considered to be living life as an Australian and making Australia their home. As a bit of a basic guide rule:

Generally, you are an Australian resident for tax purposes if any of the following applies:

  • you have always lived in Australia
  • you moved to Australia and live here permanently
  • you have been in Australia continuously for six months or more, and for most of the time you have been in the same job, and living in the same place
  • you have been in Australia for more than half of the financial year, unless your usual home is overseas, and you do not intend to live in Australia.

Source: Australian Taxation Office

In the nitty-gritty of it all, there are a few tests that determine whether or not you are a Resident for Australian Income Tax Purposes and these are:

  1. The Resides Test
  2. The Domicile Test
  3. The 183-day Test
  4. The Superannuation Test

The Australian Taxation Office has some simple scenario’s to help you understand things a little easier:

Some common scenario’s

Now if for some reason you’re not classified as a Resident for Australian Income Tax Purposes does not mean that you have to do nothing. As a Non-Resident for Australian Income Tax Purposes you still have to lodge your Tax Return here in Australia and if you’ve underpaid tax, you will more than likely have to repay an amount back when you lodge your Australian Income Tax Return.


Be certain to advise your employer when you start that you are a Temporary Resident and that they must withhold Tax at the rate for “Non-Residents”. If it does turn out that you’re a Non-Resident for Australian Income Tax Purposes, the damage should be much less.

Questions? please call Anthony on 02 8065 5668