Australian citizens and permanent residents who work from abroad often stay inside the Australian tax system. The Australian Taxation Office (ATO) uses four residency tests to decide this. This guide explains how the tests work for people on the move. It also covers what changes if you stay a resident or become a foreign resident, and how HELP debt, health cover, super, and property are treated.
How does Australia decide if you are a tax resident?
Australia taxes people by residency. The ATO says nationality plays a very small part in this decision. Meeting any one of four tests makes you an Australian resident for tax purposes.
- Resides test: The main test. The ATO looks at all the facts, such as time in Australia, intentions, family and work ties, assets, and daily life.
- Domicile test: You are a resident if Australia is your permanent home by law. The exception is a permanent place of abode outside Australia.
- 183-day test: You are a resident if you spend more than half the income year in Australia. The exception is a usual home overseas with no plan to live here. The income year runs from 1 July to 30 June.
- Commonwealth superannuation test: This covers certain Commonwealth government employees working overseas, and their families.
For Australians who leave to work abroad, the ATO says the domicile test usually applies. A person who has lived only in Australia generally keeps an Australian domicile while overseas. The exception is a person who chooses to move to another country permanently.
Why moving between countries can keep you an Australian resident
The domicile test turns on whether you have a permanent place of abode outside Australia. In ATO terms, permanent means settled rather than temporary. It does not mean forever.
The ATO lists four factors for this decision:
- Length of stay: how long you plan to stay overseas, how long you actually stay, and whether the stay is continuous.
- A settled home overseas: whether you have set up a home in another country.
- A home in Australia: whether you keep a residence in Australia while you are away.
- Family and financial ties: where your family lives and where your money is based.
The ATO also says a traveller with no fixed home overseas, who moves from one country to another, has no permanent place of abode abroad. Under the domicile test, such a traveller stays an Australian resident.
The ATO’s own examples show the two ends of the range:
- Emily teaches English in Japan on a one-year contract, rents out her Australian property, and plans to return. The ATO treats her as an Australian resident.
- Bronwyn takes a three-year job overseas with her husband and children. The family rents a home there and rents out their Australian house. The ATO treats her as a foreign resident.
A nomad who changes base every few weeks and keeps a home in Australia may look like Emily. A nomad who settles for years in one country with family and a lease may look like Bronwyn. Each case depends on the full set of facts.
The resides test also looks at daily life. The ATO weighs these factors:
- Time and intent: how long you are in Australia and why you are there.
- Ties: family, business or work links, and your behaviour in Australia.
- Assets and lifestyle: where your assets are kept and where you live and socialise.
The ATO says six months is a considerable time but does not decide the matter alone. All the factors count together.
What changes if you stay an Australian resident?
Residents pay Australian tax on income from anywhere in the world. The ATO says this includes foreign employment income, even if tax was withheld in the country where you earned it.
The resident tax rates for 2026-27 are below. The second rate fell from 16% to 15% on 1 July 2026.
- $0 to $18,200: nil
- $18,201 to $45,000: 15c for each $1 over $18,200
- $45,001 to $135,000: $4,020 plus 30c for each $1 over $45,000
- $135,001 to $190,000: $31,020 plus 37c for each $1 over $135,000
- Over $190,000: $51,370 plus 45c for each $1 over $190,000
The 2% Medicare levy comes on top of these amounts.
If you paid tax on foreign income in the country where you earned it, you may claim a foreign income tax offset. Claims above $1,000 need an extra limit calculation. All amounts must be converted to Australian dollars. The ATO can charge penalties and interest on foreign income you leave out.
Health cover needs a closer look. If you cancel Australian private hospital cover, you may owe the Medicare levy surcharge once your income passes the threshold. According to the ATO, travel insurance does not count as hospital cover. In one ATO example, $88,000 of exempt foreign income plus $20,000 of taxable income gave $108,000 of income for the surcharge, and a 1% surcharge applied. Readers can compare nomad health insurance plans before deciding.
Your super stays under the same rules while you are abroad. You cannot access it until you reach preservation age and retire, or meet another condition of release. You can lodge your return from overseas through a myGov account linked to the ATO.
What changes if you become a foreign resident?
Foreign residents pay Australian tax only on Australian-source income. Spending more than 183 days overseas does not make you a foreign resident by itself, according to an ATO Community answer. A tax agent can check whether your pay counts as Australian-source.
The foreign resident rules differ in three ways:
- Higher starting rate: Under the ATO’s 2025-26 table, foreign residents pay 30c per dollar up to $135,000, 37c from $135,001 to $190,000, and 45c above that.
- No tax-free threshold: The 30% rate applies from the first dollar of Australian income.
- No Medicare levy: Foreign residents are not required to pay it, according to the ATO.
On $100,000 of Australian income in 2025-26, a resident pays $20,788 before the Medicare levy. A foreign resident pays $30,000.
Property needs care. The ATO explains the capital gains tax (CGT) rules in its guide for Australians living overseas:
- Home rented out while you are away: A resident who leaves can treat the home as a main residence for up to six years. If the home is not rented out, the time is unlimited.
- Selling as a foreign resident: For sales after 30 June 2020, foreign residents lose the main residence exemption unless they meet the life events test.
- Other assets: When you stop being a resident, some assets are treated as sold for CGT. You can choose to defer this.
Does HELP debt follow you abroad?
Study and training loan debts keep running while you live overseas. The rules apply to HELP, VET Student Loan, and Australian Apprenticeship Support Loan debts. They apply whether you stay a resident or become a foreign resident. The ATO sets three steps for overseas repayments:
- Notify the ATO: Tell the ATO within 7 days of leaving if you will be away 183 days or more in any 12 months.
- Report worldwide income: Each year, report your worldwide income or lodge a non-lodgment advice.
- Repay above the threshold: Repayments are due when worldwide income passes the minimum repayment threshold.
How do tax treaties help with double tax?
A person can be a tax resident of Australia and another country at the same time. A double tax agreement then decides which country may tax certain income. According to the ATO, a treaty can limit Australia’s taxing rights in some cases.
The ATO’s list of tax treaties, published on 30 May 2026, includes several popular nomad bases:
- Listed: Thailand, Vietnam, Malaysia, Indonesia, Mexico, Spain, Japan, and Malta.
- Listed but not yet in force as at 18 March 2026: Portugal, Croatia, and Slovenia.
- Not listed: the UAE, Colombia, Brazil, and Georgia.
Without a treaty, the foreign income tax offset can still reduce double tax on foreign income. Host countries also have their own rules. Some use a day-count test, such as 183 days, to decide local tax residency. Each country needs its own check.
Other passports follow other tests. Readers can see the UK tax rules, the Canadian tax rules, or how US citizens file taxes while working abroad.
Are the Australian residency rules changing?
The 2021-22 Budget announced a plan to replace the four tests. Treasury consulted on a model in 2023. The model has a bright-line rule that makes 183 days or more in Australia a residency trigger, with secondary tests for everyone else.
The plan is not law. The ATO’s residency guidance, updated on 3 June 2026, still lists the four existing tests.
Records that help if the ATO asks about your residency
The ATO looks at behaviour, so records that show your real pattern of life carry weight:
- Day log: the dates you enter and leave each country.
- Home records: leases, utility bills, and proof of any Australian property you rent out or keep empty.
- Ties to Australia: bank accounts, memberships, mail redirects, and where your family lives.
- Foreign tax receipts: proof of tax paid abroad, which supports an offset claim.
- Written plans: contracts or notes that show how long you meant to stay in each place.
Who needs to read this, and who can skip it
This guide matters most for:
- Australian citizens or permanent residents who recently left, or plan to leave, while working remotely.
- People paid by an Australian employer while living overseas.
- Owners of Australian property or people with a HELP or similar study loan.
People who have not lived in Australia and spend little time there usually fall outside these rules. They can start with the tax rules of their own country.
A base with a tax treaty, a clear visa path, and a day count that suits your plans makes the paperwork easier. Check these points with a registered tax agent before you commit to a long stay. Once your tax picture is clear, you can start planning your next destination and build a route that fits your work, your budget, and your time zone.
Information as of 5 October 2026. Tax and immigration rules change. This article is general information and not tax advice. Please confirm current requirements with the ATO or a registered tax agent with international experience before making plans.