Understanding Your Tax Obligations as a New Arrival

Filing a tax return in Australia can feel overwhelming when you first arrive, but understanding your obligations early makes the process straightforward. The Australian Taxation Office (ATO) requires most people who earn income in Australia to lodge a tax return each financial year. The financial year runs from 1 July to 30 June, and tax returns are typically due by 31 October each year (or 15 May if you use a registered tax agent).

As a new arrival, your tax obligations depend on your residency status for tax purposes. This is different from your visa status. The ATO considers you an Australian resident for tax purposes if you have lived in Australia for most of the financial year, or if you intend to live here permanently. Once you are a tax resident, you must declare all income earned worldwide, not just income earned in Australia.

If you arrived partway through the financial year, you may only need to declare income from the date you arrived. However, if you are a non-resident for tax purposes, you only declare Australian-sourced income. Understanding which category you fall into is crucial because it affects how much tax you owe and which deductions you can claim.

Determining Your Tax Residency Status

The ATO uses several tests to determine whether you are a resident for tax purposes. The most common is the residency test, which looks at whether you have been in Australia for more than half the financial year (183 days or more). If you arrived on 1 January, you would be a resident for the remainder of that financial year because you will have been here for more than 183 days by 30 June.

Another important test is the permanent place of abode test. If you have a permanent place of abode in Australia (such as a home you own or a lease in your name), you may be considered a resident even if you have not been here for 183 days. This applies even if you spend time overseas.

The superannuation test also matters. If you are a member of an Australian superannuation fund, you are generally treated as a resident for tax purposes. This is particularly relevant for skilled workers and permanent residents who have started contributing to super through their employer.

To confirm your residency status, you can contact the ATO directly or use their online resources. Your employer should also help clarify this when you start work, as it affects your tax file number (TFN) registration and how much tax they withhold from your pay.

Getting Your Tax File Number and Setting Up Online

Before you can work or lodge a tax return, you need a Tax File Number (TFN). You can apply for a TFN online through the ATO website or by visiting an ATO office. The application is free and usually takes about 2 weeks. You will need your passport, visa details, and Australian address.

Once you have your TFN, set up an account on the ATO's online portal, myTax. This is the easiest way to lodge your tax return and track your tax history. You will need your TFN and an Australian phone number to register. myTax is free to use and guides you through each question step by step.

If you prefer not to use myTax, you can lodge a paper tax return, but this takes longer to process. You can also engage a registered tax agent to lodge on your behalf. Tax agents charge fees (typically $200 to $500 for a simple return), but they can help you claim deductions you might miss and ensure you get the maximum refund.

What Income and Deductions to Declare

When you lodge your tax return, you must declare all income you earned during the financial year. This includes salary and wages, tips, bonuses, and any side income from freelance work or selling items online. If you worked for multiple employers, you will receive a payment summary from each one. Attach these to your tax return.

You can claim deductions for work-related expenses you paid out of your own pocket. Common deductions for new arrivals include:

  • Uniforms and protective clothing (if required by your employer and not provided)
  • Work-related travel (but not commuting to and from work)
  • Professional fees and memberships
  • Home office expenses (if you work from home and can calculate the percentage of your home used for work)
  • Laundry and dry cleaning for work clothes
  • Tools and equipment under $300
  • Subscriptions to professional journals or software

Keep receipts and records for all deductions. The ATO may ask you to prove your claims if you are audited. A common mistake new arrivals make is claiming personal expenses as work deductions. For example, you cannot claim the cost of getting to work, meals during work, or general clothing. Only claim expenses that are directly related to earning your income and that you paid yourself.

If you are studying while working, you cannot claim study expenses as a deduction. However, you may be eligible for the Higher Education Loan Program (HELP) or other student support, which is separate from your tax return.

Tax Offsets and Refunds for New Arrivals

Tax offsets reduce the amount of tax you owe. The most common offset for new arrivals is the Low Income Tax Offset (LITO), which applies if you earn less than a certain amount. For the 2025-26 financial year, if you earn less than $18,200, you do not pay income tax at all. If you earn between $18,200 and $45,000, you may be eligible for LITO.

You may also be eligible for the Medicare Levy Exemption if you are a temporary visa holder and not covered by Medicare. This exemption means you do not have to pay the Medicare Levy (currently 2% of your income) if you have private health insurance.

If your employer has withheld too much tax from your pay, you will receive a refund when you lodge your tax return. This is common for new arrivals who may not have been on the Australian tax system for the full year. The ATO typically processes refunds within 2 weeks if you lodge online through myTax.

If you are owed a refund, the ATO will deposit it directly into your Australian bank account. Make sure your bank details are correct on your tax return. If you have a debt to the ATO (for example, from a previous year), the ATO may offset your refund against that debt.

Common Mistakes New Arrivals Make

One of the biggest mistakes is not declaring cash income. If you work in hospitality, retail, or any job where you receive tips or cash payments, you must declare this income. The ATO has data-matching systems that can identify unreported income.

Another common error is claiming deductions without keeping records. The ATO requires you to keep receipts and records for at least 5 years. If you cannot prove a deduction, the ATO will disallow it and you may face penalties.

Some new arrivals also forget to update their details if they move house or change their name. Make sure you notify the ATO of any changes to your personal information. You can do this through myTax or by contacting the ATO directly.

Finally, do not ignore ATO correspondence. If the ATO sends you a letter asking for more information or notifying you of an audit, respond promptly. Ignoring the ATO can result in penalties and interest charges.

Useful Official Sources

Frequently Asked Questions

Do I need to file a tax return if I only worked for part of the year?

Yes, if you earned income in Australia during the financial year, you must lodge a tax return even if you only worked for part of the year. The ATO requires all residents to declare their income. You may receive a refund if tax was withheld from your pay.

What is the difference between a tax resident and a visa resident?

Tax residency and visa residency are separate. You can be a permanent resident on your visa but a non-resident for tax purposes if you have not been in Australia long enough. Conversely, you can be on a temporary visa but a tax resident if you have lived here for more than 183 days. Your tax obligations depend on your tax residency status, not your visa type.

When is the deadline to lodge my tax return?

The deadline is 31 October each year if you lodge your own return online through myTax. If you use a registered tax agent, the deadline is 15 May the following year. Missing the deadline can result in penalties, so lodge early if possible.

Can I claim my study expenses as a tax deduction?

No, study expenses are not tax deductible. However, if you are studying at an Australian university, you may be eligible for HELP (Higher Education Loan Program) or other student support schemes. These are separate from your tax return and are managed by Services Australia.

How long does it take to get a refund from the ATO?

If you lodge your tax return online through myTax, the ATO typically processes refunds within 2 weeks. If you lodge a paper return, it may take 4 to 8 weeks. The ATO will deposit your refund directly into your Australian bank account.

Do I need to keep receipts for all my deductions?

Yes, the ATO requires you to keep receipts and records for at least 5 years to support your deductions. If you cannot prove a deduction, the ATO will disallow it. Keep all receipts, invoices, and records related to work-related expenses.

What if I earned income in my home country before arriving in Australia?

If you are a tax resident of Australia, you must declare worldwide income, including income earned before you arrived. However, you may be eligible for a foreign income tax offset if you paid tax on that income in another country. Consult the ATO or a tax agent for advice on your specific situation.

This is general information only. It is not legal, migration, financial, tax, medical, or professional advice. Always check official sources before acting.