Taxes in Australia for US expats: rates, brackets, and filing rules
Australia taxes its residents on worldwide income at rates from 0% to 45%. As a US citizen or green card holder, you also owe US taxes on the same income. This guide covers both sides: what Australia takes, what the US takes, and how to avoid paying twice.
Australia taxes at a glance
Two countries, two tax years, two separate filing deadlines – the table below maps the key rules for 2025–26.
| Tax item | Resident rule | Non-resident rule | US expat note |
|---|---|---|---|
| Tax year | July 1, 2025 – June 30, 2026 | Same | US tax year: Jan 1 – Dec 31, 2025 |
| Filing deadline | October 31, 2026 | Same | US expat deadline: June 15, 2026 |
| Tax-free threshold | $18,200 AUD | None – 30% from $1 | Applies to Australian tax only |
| Top rate | 45% above $190,000 AUD | 45% above $190,000 AUD | The Foreign Tax Credit can reduce US tax on foreign-source income, subject to Form 1116 limitation rules |
| Medicare levy | 2% (most residents) | Not applicable | Not deductible on US return as a tax |
| CGT discount | 50% for assets held 12+ months | Generally not available | Gain still reportable on US Schedule D |
| Super guarantee | 12% employer contribution from July 1, 2025 | Employer obligations may still apply | Complex US reporting; see superannuation section |
| Tax treaty | 1982 treaty, 2001 Protocol | Same | Saving clause: US still taxes its citizens |
Foreign residents have no tax-free threshold. For 2025–26, income is taxed at 30% up to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000, with no Medicare levy. Current rates are published by the Australian Taxation Office.
The TFX expat tax overview covers how these Australian rules interact with your US filing obligations.
Who qualifies as a tax resident in Australia?
Australian tax residency is determined by four tests. Satisfying any one of them makes you a resident for tax purposes.
The four tests are:
- Resides test: You live in Australia permanently or for a significant period and have a settled home here.
- Domicile test: Your permanent home (domicile) is in Australia.
- 183-day test: You spend 183 or more days in Australia during the tax year. An exception applies if you can show your usual place of abode is outside Australia and you have no intention of settling here.
- Commonwealth Superannuation Fund test: You are an Australian government employee contributing to a Commonwealth super scheme.
Tax residency is a separate question from immigration status. You can hold a temporary visa and still be a tax resident.
Use the table below as a starting point – complex cases need local advice.
| Situation | Likely outcome |
|---|---|
| Long-term move, local lease, Australian bank account, family relocated | Resident |
| Career break, kept US home and accounts, no local ties | Non-resident |
| 200+ days in Australia, working remotely, no fixed Australian address | Needs professional advice |
| Digital nomad, split between multiple countries, Australia is one stop | Needs professional advice |
| Retired to Australia, property purchased, strong local connections | Resident |
TFX client scenario: John moves to Australia with his family for the long term. He rents a house, opens an Australian bank account, and vacates his US property. He passes the residency test. Marco, by contrast, spends eight months in hostels while working casual bar jobs. He keeps his US bank account and home. Despite spending more than 183 days in Australia, his usual place of residence remains the US – he fails all four tests and is a non-resident for tax purposes.
For guidance on moving to Australia from the US, including visa and residency timing, see the TFX country guide.
Tax effects of being an Australian resident
Resident status triggers five specific tax consequences – it does not automatically grant Medicare eligibility, which depends on visa status and reciprocal healthcare agreements.
The five tax effects of being a resident are:
- Tax-free threshold: The first $18,200 AUD of income is not taxed. Combined with the Low Income Tax Offset, most residents pay no income tax until earnings exceed roughly $22,575 AUD.
- Worldwide income: Australia taxes you on all income, wherever earned, including US-source income, foreign rental income, and overseas investments.
- Medicare levy: Most residents pay a 2% Medicare levy, but low-income thresholds can reduce or eliminate it; for 2025–26, the thresholds for most taxpayers are $28,011 and $35,013.
- Superannuation: Eligible employees receive 12% employer super contributions from July 1, 2025. See the superannuation section for US reporting consequences.
- Lower entry rate: Residents pay 16% on income between $18,201 and $45,000 AUD; non-residents pay 30% from the first dollar.
For the FEIE and how it interacts with the income tax threshold in Australia, see the TFX FEIE guide.
Tax effects of being a non-resident
Non-residents have no tax-free threshold. For 2025–26, they pay 30% up to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000. That makes non-resident status more expensive for most people earning under roughly $100,000 AUD.
The four main tax effects of non-resident status are:
- Australian-source income only: Australia does not tax your foreign income. If most of your income is from the US or other countries, this can be an advantage.
- No Medicare levy: Non-residents are not subject to the 2% levy.
- No tax-free threshold: Foreign residents pay 30% up to $135,000 AUD, 37% from $135,001 to $190,000 AUD, and 45% above $190,000 AUD – there is no tax-free threshold and no Medicare levy.
- Employer super obligations still apply: Non-resident status does not automatically remove your employer's obligation to pay the super guarantee for eligible employees.
For the interaction between non-resident status and social security tax, see the TFX Social Security guide.
What types of taxes do US expats pay in Australia?
Six main taxes affect Americans living in Australia. Income tax in Australia is the largest, but superannuation, CGT, and GST each create separate planning considerations.
Understanding which taxes hit residents vs. non-residents changes the after-tax picture significantly.
| Tax | Rate | Who pays | US expat planning note |
|---|---|---|---|
| Personal income tax | 0–45% (residents); 30–45% (non-residents) | Everyone with an Australian income | Foreign Tax Credit or FEIE can offset US tax |
| Medicare levy | 2% | Most Australian tax residents | Not treated as a creditable foreign tax on the US return |
| Capital gains tax | Marginal rate (CGT discount available to residents) | Residents on worldwide gains; non-residents on Australian taxable property | Must also report on US Schedule D; different tax year |
| GST | 10% | Consumers of most goods and services | Generally not relevant to individual US expat returns |
| Superannuation | 12% employer contribution | Eligible employees | May require Forms 8938, FBAR, 3520, or 8621 |
| Stamp duty | Varies by state; foreign buyer surcharges 7–9% | Property buyers | Foreign buyer surcharges depend on each state's definition of a foreign person |
Personal income tax rates
The taxation rates in Australia are progressive, spread across five brackets for residents. Foreign residents have no tax-free threshold. For 2025–26, the rate is 30% on the first $135,000 AUD, rising to 37% and then 45% at higher income levels.
Australian resident income tax rates for 2025–26 (excluding Medicare levy)
| Taxable income (AUD) | Tax on excess |
|---|---|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | $4,288 + 30% of excess over $45,000 |
| $135,001 – $190,000 | $31,288 + 37% of excess over $135,000 |
| $190,001 and above | $51,638 + 45% of excess over $190,000 |
Source: Australian Taxation Office. These Australian tax brackets do not include the 2% Medicare levy.
Foreign resident income tax rates for 2025–26
| Taxable income (AUD) | Tax on excess |
|---|---|
| $0 – $135,000 | 30% |
| $135,001 – $190,000 | $40,500 + 37% of excess over $135,000 |
| $190,001 and above | $60,850 + 45% of excess over $190,000 |
Source: Australian Taxation Office. No Medicare levy applies to foreign residents.
The Australian tax scales are progressive, so your marginal rate is not what you pay on all your income. Two worked examples show the difference between marginal and average rates:
At AUD 80,000 (resident): Income tax is $14,788 plus $1,600 Medicare levy = $16,388 total. The average tax rate in Australia at this income is 20.5% – well below the 30% marginal rate that applies to the top slice of income.
At AUD 150,000 (resident): Income tax is $36,838 plus $3,000 Medicare levy = $39,838 total. The Australian effective tax rate at this level is 26.6%, even though the marginal rate is 37%.
The highest tax rate in Australia for residents is 45%, applying to income above $190,000 AUD. For non-residents, the top rate is the same, but the 37% band begins at $135,000 AUD.
Note for US expats: from July 1, 2026, the 16% rate drops to 15% for income between $18,201 and $45,000 AUD. Plan around that change if your Australian income falls in that bracket.
For a broader look at how much tax US expats pay when combining Australian and US obligations, see the TFX guide.
Australia resident vs. non-resident tax rates: quick comparison
The table below shows the main differences between resident and non-resident tax in Australia for foreigners for 2025–26. The gap is largest for incomes under $45,000 AUD.
The resident tax-free threshold and 16% entry rate create a difference of up to AUD 8,500 per year at lower income levels.
| Feature | Australian resident | Foreign resident |
|---|---|---|
| Tax-free threshold | $18,200 AUD | None |
| Entry rate | 16% (on $18,201–$45,000) | 30% from $1 |
| Top rate | 45% (above $190,000 AUD) | 45% (above $190,000 AUD) |
| Medicare levy | 2% (generally) | Not applicable |
| Taxable income scope | Worldwide income | Australian-source income only |
| CGT 50% discount | Available (assets held 12+ months) | Generally not available |
The Australian tax rate for foreigners starts at 30% regardless of how little they earn. For a US expat earning AUD 40,000 in Australia, resident status can save about AUD 8,500 in income tax before the Medicare levy is considered.
Do Sydney, Melbourne, and Brisbane have different income tax rates?
No. Sydney, Melbourne, and Brisbane do not have separate city income tax rates. Sydney income tax, Melbourne tax rates, and Brisbane tax rates are all determined by the same federal Australian tax brackets that apply across the entire country. There is no state or city income tax in Australia.
What does vary by state and territory is stamp duty on property purchases, land tax rates, and foreign buyer surcharges. A property purchase in NSW currently carries a 9% foreign buyer surcharge; in Victoria and Queensland, the rate is 8%. These are one-time property transaction taxes, not income taxes.
For income earned while working in Sydney, Melbourne, or Brisbane – whether you are an expat or a local – the ATO applies the same resident or non-resident salary tax brackets in Australia to everyone. The city where you work does not change the rate.
Americans doing expat US tax planning in Melbourne or any other Australian city follow the same US filing rules as expats in the rest of the country. See the US filing requirements section below.
For relocation planning, moving to Australia from the US covers the tax residency timing question.
Capital gains tax
Australia taxes capital gains as ordinary income at marginal rates. For residents, assets held for more than 12 months qualify for a 50% CGT discount, which effectively halves the taxable gain before applying your marginal rate.
Foreign residents generally cannot access this discount and are taxed on the full gain, but only on taxable Australian property.
How Australian CGT interacts with US reporting
The same gain must also be reported on your US return on Schedule D and Form 8949. Because Australia's tax year ends June 30 and the US tax year ends December 31, a gain realized in, say, January 2026 falls in the US 2026 tax year but Australia's 2025–26 year.
You must convert the AUD proceeds and cost base to USD using the exchange rate on the date of sale, not a year-end rate. The Australian tax you pay on the gain can usually be claimed as a Foreign Tax Credit on Form 1116 to offset US tax on the same gain.
For a detailed breakdown of how capital gains tax on foreign property works for Americans abroad, see the TFX guide.
Dividend, interest, and rental income tax
Australian investment income is taxed at marginal rates. Each income type has a different Australian treatment and a separate US reporting obligation.
Every income type below has both an Australian and a US filing consequence.
| Income type | Australian tax treatment | US reporting | Common form |
|---|---|---|---|
| Franked dividends (Australian company, tax already paid) | Grossed up into taxable income; franking credits reduce tax payable | Report gross dividend on Schedule B | Form 1040, Schedule B |
| Unfranked dividends (Australian company) | Subject to 30% withholding tax for non-residents; residents taxed at marginal rate | Report gross dividend; Foreign Tax Credit available | Form 1040, Schedule B; Form 1116 |
| Australian bank interest | Taxed at marginal rate for residents; withholding tax for non-residents | Report on Schedule B | Form 1040, Schedule B |
| Rental income from Australian property | Taxable after deductible expenses (interest, repairs, depreciation) | Report on Schedule E; different depreciation rules apply | Form 1040, Schedule E |
| US brokerage income while Australian resident | Included in worldwide income; taxed at marginal rate | Report as normal on US return; also on Australian return | Form 1040; Schedule B or D |
For more on the tax consequences of foreign investing, including Australian shares held by US expats, see the TFX guide. The ATO investing in shares page explains franking credits in detail.
Superannuation and retirement taxation
From July 1, 2025, employers must contribute 12% of eligible employees' ordinary time earnings to superannuation. That is the final scheduled increase under current law.
Australian super creates US reporting obligations that do not apply automatically – missing them is one of the most common filing mistakes for Americans in Australia.
On the Australian side
Employer contributions enter the super fund and are taxed at a concessional rate of 15% inside the fund. In retirement, most withdrawals are tax-free for members over 60.
On the US side
How the IRS treats Australian super depends on the fund's structure and whether any elections have been made. There is no treaty article that explicitly defers US tax on employer contributions the way the US-Canada treaty defers RRSP income.
The conservative practitioner position includes employer contributions in gross income in the year made, disclosing on Form 8833 if a treaty-based deferral position is taken instead. Both approaches have professional support; neither has a definitive IRS ruling.
The four US reporting forms that may apply – depending on fund structure – are:
- Form 8938 (FATCA): required if your specified foreign financial assets exceed the IRS thresholds in US dollars. For many single filers abroad, that means more than $200,000 at year-end or $300,000 at any time, with higher thresholds for joint filers.
- FBAR (FinCEN Form 114): required if your super account, combined with other foreign accounts, exceeds $10,000 at any point during the year.
- Form 3520 / 3520-A: required if the fund is classified as a foreign grantor trust under US rules.
- Form 8621: required if the fund holds investments that qualify as passive foreign investment companies (PFICs).
For a full breakdown of how Australian superannuation interacts with US taxes, including fund-by-fund analysis, see the TFX dedicated guide.
Corporate tax
For 2025–26, Australian base rate entities – companies with aggregated turnover under $50 million AUD – pay a 25% flat rate. All other companies pay the standard 30% rate. The previously cited 28.5% rate was repealed and does not apply.
US expats running businesses through an Australian company face both Australian corporate tax and US tax on the same profits. See TFX's foreign company tax reporting guide for how the two systems interact.
Other taxes: GST, stamp duty, property, and inheritance
Australian GST
GST is a 10% consumption tax applied at each stage of the supply chain for most goods and services. It is not an income tax and does not appear on your individual Australian tax return as a separate line unless you are registered for GST as a business. Some supplies – including basic food, exports, health, and most education – are GST-free.
Inheritance, estate, and gift tax
Australia abolished its inheritance and estate tax in 1979. There is no gift tax either. However, CGT rules still apply when assets from a deceased estate are sold or transferred to a beneficiary, and superannuation death benefits have their own tax treatment inside the fund.
US citizens are subject to US estate and gift tax on their worldwide assets, regardless of where they live. If you have assets in both countries, US estate planning remains necessary even though Australia will not tax your estate at death.
For the US side of an Australian inheritance, see the TFX foreign inheritance tax guide.
Property taxes
Land tax, council rates, and state government charges are levied at the state and territory level. Foreign buyers pay standard stamp duty plus an additional surcharge: currently 9% in NSW (from January 1, 2025), 8% in Victoria and Queensland.
Foreign buyer surcharges depend on each state's definition of a foreign person. In NSW, Australian citizens and people ordinarily resident in Australia are not foreign persons; Victoria and Queensland apply their own foreign-purchaser rules.
The federal government also charges an annual vacancy fee for foreign owners of Australian residential property left vacant for more than 183 days per year.
For US expats who own Australian property, five separate tax issues apply:
- Australian land tax at state rates
- US Schedule E reporting of Australian rental income
- Depreciation: Australia and the US use different methods and rates
- FX conversion: rental income and expenses must be converted to USD
- FBAR: if a mortgage offset account is held at an Australian bank and the combined balance exceeds $10,000, it must be reported
For full guidance on buying property in Australia as a foreigner, see the TFX guide.
Stamp duty
Stamp duty on property transfers is a state and territory charge. Rates vary significantly: in NSW, the standard transfer duty on a $800,000 AUD property is roughly $31,335 before any surcharges. Foreign buyers pay that amount plus the foreign buyer surcharge on top.
US citizens with Australian citizenship or permanent residency are generally exempt from the foreign buyer surcharge. Temporary residents and non-residents face the full surcharge. See NSW Revenue transfer duty for current NSW thresholds and exemptions.
What tax deductions can I claim in Australia?
Work-related expenses, self-education, tax agent fees, and charitable donations are the main deductible categories for individual taxpayers in Australia. Claiming a deduction on your Australian return does not reduce your US taxable income – the two systems are separate.
Keep receipts for every item in the table below: the ATO requires substantiation for most claims.
| Deduction | Who can claim | Records needed | Common mistake |
|---|---|---|---|
| Work-related expenses (uniform, tools, travel) | Employees, must be directly tied to income-earning | Receipts, logbooks for travel | Claiming personal clothing or general commuting costs |
| Self-education (directly related to current job) | Employees and self-employed | Receipts, course enrollment confirmation | Claiming education for a new career, not current role |
| Tax agent fees | Anyone who paid for tax preparation | Receipt or invoice | Forgetting to claim in the year paid, not the year the return covered |
| Charitable donations ($2 or more to a registered DGR) | Anyone | Donation receipt from a Deductible Gift Recipient | Donating to an overseas charity not registered as an Australian DGR |
| Work-from-home expenses | Employees working from home | Records of hours worked; receipts for actual costs if using actual-cost method | Using the defunct 67-cent rate (which ended after 2023–24) or the 52-cent shortcut method, which ended after 2021–22 |
Two work-from-home methods remain available in 2025–26: the fixed-rate method (70 cents per work hour) and the actual-cost method. The 67-cent rate applied to 2022–23 and 2023–24, and the 52-cent shortcut ended after 2021–22.
Australian deductions reduce your Australian taxable income. They do not automatically carry over to your US Form 1040. For the documents TFX needs to prepare your US return while you are in Australia, see the TFX information checklist.
When are Australian and US tax returns due?
Australia and the US run on different tax years. The Australian year ends June 30; the US year ends December 31. That gap means two separate filing seasons with different payment rules.
US taxes are due to be paid by April 15, even if you file later – the extension to June 15 covers the return, not the payment.
| Item | Australia | US |
|---|---|---|
| Tax year | July 1, 2025 – June 30, 2026 | Jan 1 – Dec 31, 2025 |
| Standard return deadline | October 31, 2026 | April 15, 2026 |
| Expat / automatic extension | Later if using a registered tax agent's lodgment schedule | June 15, 2026 (automatic for Americans abroad) |
| Further extension | Available via tax agent | October 15, 2026 (available by filing Form 4868) |
| Tax payment deadline | Generally with return | April 15, 2026 (interest accrues from this date even if you file later) |
| FBAR deadline | Not applicable | April 15, 2026 (automatic extension to October 15, 2026) |
For all US expat filing dates in one place, see TFX 2026 tax deadlines.
What are my US tax filing requirements in Australia?
US citizens and green card holders must file Form 1040 and report worldwide income every year regardless of how long they have lived in Australia. For the 2025 tax year, single filers are generally required to file when gross income is $15,750 or more.
Many Americans in Australia use the Foreign Tax Credit, but the better choice depends on your income mix and whether the FTC limit fully absorbs the foreign tax. FEIE may still be useful for some earned income.
Every form in the table below has a specific trigger – missing one can result in penalties separate from any income tax owed.
| Form | What triggers it | Australia example |
|---|---|---|
| Form 1040 | All US citizens and green card holders, regardless of residence | Required every year while living in Sydney, Melbourne, or Brisbane |
| Form 2555 (FEIE) | Foreign earned income; must pass bona fide residence or 330-day test | Excludes up to $130,000 of Australian salary from US tax for 2025 |
| Form 1116 (Foreign Tax Credit) | Foreign taxes paid to Australia on income are also taxable in the US | Can reduce US tax on Australian-source income, subject to Form 1116 limitation rules |
| FBAR (FinCEN 114) | Aggregate foreign accounts exceed $10,000 at any point during the year | Australian bank account, super fund, and any other accounts combine toward the threshold |
| Form 8938 | Specified foreign financial assets above the IRS thresholds in US dollars – more than $200,000 at year-end or $300,000 at any time for many single filers abroad; higher for joint filers | Australian super balance, shares, and bank accounts count |
| Form 3520 / 3520-A | Super fund classified as a foreign grantor trust, or foreign gifts received | Common for certain industry super funds and SMSFs |
| Form 8621 | Super fund (or other investment) classified as a PFIC | Depends on how the fund invests its assets |
| Form 8833 | Treaty-based position taken that reduces the US tax | Used if claiming treaty-based deferral of super contributions |
For a real-world example of US expat tax in Australia spanning 17 years with zero penalties, see the TFX client case study. IRS Publication 54 is the authoritative guide for American expat taxes in Australia and abroad.
Does the US have a tax treaty with Australia?
The US and Australia signed their income tax treaty on August 6, 1982. A Protocol amending the treaty was signed on September 27, 2001, and entered into force on May 12, 2003. There was no 2019 update – the original article's reference to that date was incorrect.
The treaty reduces withholding rates on investment income but does not remove the US filing obligation for US citizens.
| Income type | Treaty role | US citizen note | Form often used |
|---|---|---|---|
| Dividends | 15% max (5% for 10%+ corporate shareholders; 0% for 80%+ owned subsidiaries) | Saving clause: US still taxes citizens on the full amount; treaty rate reduces Australian withholding | Form 1116 |
| Interest | 10% max (0% for financial institutions and government entities) | US taxes interest in full; Australian withholding credited | Form 1116 |
| Royalties | 5% max | US taxes in full; Australian withholding credited | Form 1116 |
| Employment income | Primary taxing right generally in the country of work | US taxes worldwide; FTC offsets | Form 1116 |
| Pensions | Complex; no explicit provision deferring super | US conservative position: employer super contributions are taxable in the year made | Form 8833 if treaty position taken |
| CGT | Australia's CGT is covered under the treaty | Both countries may tax the same gain; FTC usually resolves double taxation | Form 1116; Schedule D |
The saving clause in Article 1 of the treaty allows the US to tax its citizens as if the treaty did not exist, so treaty benefits rarely reduce US filing obligations for Americans. For the full analysis, see the TFX US-Australia tax treaty guide.
The IRS Australia treaty documents page contains the 1982 convention and 2001 Protocol in full.
Social Security and the totalization agreement
The US-Australia Totalization Agreement, effective in 2002, prevents Americans working in Australia from paying into both countries' social security systems at the same time.
The agreement determines which country's system applies based on who the employer is and how long the assignment lasts.
| Situation | Coverage |
|---|---|
| A US employer assigns an employee to Australia for under 5 years | US Social Security; certificate of coverage from SSA required |
| Assignment to Australia is usually covered by the US system for up to five years; longer assignments can sometimes be extended by written agreement | US system, potentially extendable |
| Employed directly by an Australian employer in Australia | Australian system |
| Self-employed US citizen residing in Australia | Generally Australian system |
A certificate of coverage shows which system applies. Under the agreement, temporary assignments can generally be covered by one system for up to five years, and the competent authorities may agree in writing to extend that period. Without a certificate, both countries may assert a claim.
For the interaction between the totalization agreement and Social Security tax, see the TFX Social Security guide.
Conclusion
If you are a US citizen living in Australia, two tax systems apply simultaneously. Your Australian residency status determines whether you pay tax on worldwide income or just Australian-source income. The 2025–26 rates run from 0% to 45% for residents, plus the 2% Medicare levy. The US taxes the same income on your Form 1040, but the Foreign Tax Credit usually eliminates what you would otherwise owe twice.
Superannuation, property, and the different tax year calendars create the most common planning mistakes. Getting both returns right requires tracking the same income across two different year-end dates, two currencies, and two sets of forms.
TFX provides US expat tax services in Australia, from superannuation reporting to FTC optimization.
FAQ
Yes. Under the Australia taxation system, residents pay tax on worldwide income at 2025–26 rates of 0% to 45%, plus the 2% Medicare levy. The US also taxes the same income on Form 1040. The Foreign Tax Credit (Form 1116) or the FEIE (Form 2555) prevents most Americans from paying full tax to both countries on the same income. Most people in Australia use the Foreign Tax Credit because Australian rates generally exceed US rates.
The tax-free threshold is $18,200 AUD per year for residents in 2025–26. Combined with the Low Income Tax Offset, most residents pay no income tax until earnings reach roughly $22,575 AUD. Non-residents have no threshold – the 30% rate applies from the first dollar, making Australian tax thresholds one of the most important factors in the resident vs. non-resident decision.
Not on the same income. A common approach uses the FEIE to exclude the first $130,000 of Australian earned income from US tax for 2025, then applies the Foreign Tax Credit to income above that amount and to passive income such as dividends, interest, and rent. The FEIE requires filing Form 2555; the Foreign Tax Credit requires Form 1116.
Yes, if your combined foreign account balances exceeded $10,000 at any point during the year. FBAR is FinCEN Form 114, filed separately from your tax return, due April 15 with an automatic extension to October 15. Australian bank accounts, super funds, and offset accounts all count toward the $10,000 threshold.
It depends on the fund's structure. Some funds may be classified as foreign trusts (requiring Forms 3520 and 3520-A), some may involve PFIC investments (requiring Form 8621), and all may trigger FBAR and Form 8938 reporting once the balance is large enough. The IRS has not issued definitive guidance on whether employer contributions are immediately includable in US gross income. Get specific advice before assuming your super has no US consequences.
AU income tax for residents follows a progressive scale: 0% on $0–$18,200, 16% on $18,201–$45,000, 30% on $45,001–$135,000, 37% on $135,001–$190,000, and 45% on income above $190,000, plus the 2% Medicare levy. Non-residents pay: 30% on $0–$135,000, 37% on $135,001–$190,000, and 45% above $190,000, with no tax-free threshold and no Medicare levy. These are the current tax levels in Australia for the 2025–26 year. The ATO foreign resident rates confirm the non-resident tax slabs in Australia.
Australia covers July 1, 2025 – June 30, 2026, with returns generally due October 31, 2026 (or later via a tax agent schedule). The US covers January 1 – December 31, 2025, with a standard expat deadline of June 15, 2026. Two different calendars mean you may need to estimate Australian income when filing your US return on time.
Resident status often lowers tax on lower earned income because residents get the tax-free threshold and lower starting rate, but the better choice depends on your facts and the source of your income. Non-resident status can make sense when most of your income is foreign-source and you have minimal Australian income. The right answer depends on facts, not preference – and it also affects how Australia taxes your super, CGT, and investment income.
No. Australia has no city or state income tax. Sydney income tax, Melbourne tax, and Brisbane tax are all calculated using the same federal brackets – tax in Australia on salary income does not vary by city. What does vary by state is stamp duty on property purchases and annual land tax, but these are separate from income tax.
Non-resident tax in Australia for 2025–26 has no tax-free threshold. The rate is 30% up to $135,000 AUD, 37% from $135,001 to $190,000 AUD, and 45% above $190,000 AUD. Non-residents do not pay the Medicare levy but also cannot access the 50% CGT discount on most assets.
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