Your First Australian Tax Return: A Guide for New Arrivals

If you moved to Australia in the last year or so, your first Australian tax return works a little differently. The tax-free threshold is smaller, overseas income counts from the day you become a resident, and the Medicare levy depends on more than where you live.

As at 29 October 2026: for 2025-26 returns, people lodging their own return have until 11:59 pm local time on Monday 2 November 2026, as 31 October falls on a weekend (ATO: lodge now). If you'd like a registered tax agent to do it and haven't used one before, the ATO says to contact them before 31 October (ATO: lodge with a registered tax agent).

Prefer to listen? We covered this in New to Australia: Your First Australian Tax Return, episode 65 of the Aevum Accounting Podcast.

Your visa isn't your tax residency

The ATO uses its own tests, not the immigration rules. Someone on a temporary visa can be a resident for tax, and a visa holder can still be a foreign resident. There are four tests, but the main one is the resides test: if you live here in the ordinary sense, you're a resident and you don't need the other three (ATO: your tax residency).

Moved here for good? Then generally you're a resident from the moment you arrive. If you're not sure how long you'll stay, the ATO looks at the whole picture: how long you've been here, why you came, and your work, family and living arrangements. It calls six months a considerable time, but not a hard line (ATO: the resides test).

Students and working holiday makers. If you're here to study in a course that lasts six months or more, you may be a resident for tax. Working holiday makers have their own rates, 15% on the first $45,000 for 2025-26, and for most of them that's the same whether they're residents or not.

A smaller tax-free threshold in your first year

Part of the $18,200. A resident normally pays no tax on the first $18,200. In the year you become a resident, you get $13,464, plus a share of the remaining $4,736 for each month you were a resident, counting the month you became one (ATO: tax-free threshold for newcomers).

Two examples. Become a resident in January and that's six months, so half of the $4,736 and a threshold of $15,832. From October it's nine months, so $17,016. If you came as a visitor or on a working holiday and only became a resident later, you count from then, not from when you landed. Above your threshold, resident rates apply, 16% up to $45,000 for 2025-26, then 30% and so on. The low income tax offset isn't cut back for a part year.

Income from overseas

From the day you become a resident. Once you're a resident, you declare income from everywhere, Australia and overseas. Overseas income you earned and were paid before you became a resident isn't taxed here.

The late pay catch. Wages generally count as income when you receive them. So if your last overseas pay only lands after you've become a resident, it can be taxable in Australia, even though you did the work before you moved. If tax was taken out overseas, you may get a foreign income tax offset for it, as long as you declare the income here, and you can claim up to $1,000 without working out the limit.

Temporary residents are different

Mostly your Australian income. If you're on a temporary visa, and your partner, if you have one, isn't an Australian citizen or permanent resident living in Australia, you're usually a temporary resident for tax. Most of your foreign income isn't taxed here, and neither are most overseas capital gains. The main exception is pay for work you do while you're a temporary resident, which can be taxed here even if you do the work overseas. Late pay for work you did before you became a temporary resident usually isn't taxed here (ATO: foreign and temporary residents).

Investments you bring with you

A fresh starting value. If you've moved here for good, investments you own when you become a resident, such as shares back home, are generally treated as bought at their market value that day. The growth before then isn't taxed here, only the growth after, so keep a record of their value on that day. For temporary residents, most overseas gains aren't taxed here anyway. If you later stop being a temporary resident and stay, they're generally treated as bought at their market value on the day that changes (ATO: residency and CGT).

The Medicare levy in your first year

Only for residents. The 2% Medicare levy is for residents, so in the year you arrive you can claim a full exemption for the days before you became a resident, as long as you had no dependants then, or they were exempt too.

Not entitled to Medicare? If you're a resident but not entitled to Medicare, for example you're on a temporary visa and haven't applied for permanent residency, you may be able to claim an exemption for that time. You need a Medicare Entitlement Statement from Services Australia first, which can take up to eight weeks, and the ATO says to wait for it before you lodge (ATO: not entitled to Medicare benefits). If your partner isn't eligible for Medicare either, they need a statement too, and if your partner is on Medicare, the exemption generally doesn't work.

From the UK? Australia has reciprocal health care agreements with eleven countries, including the United Kingdom. If you lived in the UK before you came, you're generally covered by Medicare from the day you arrive until your visa expires, so you can't get a statement for that time, and as a resident for tax you pay the levy. The Medicare levy surcharge can still apply too, and overseas visitor and overseas student health cover don't count for it.

The practical bits

Your tax file number. If you're here on a visa with work rights, you can apply for a tax file number online, and it should arrive within 28 days (ATO: apply for a TFN). If you start a job without one, you have 28 days to get one and give it to your employer, or they have to take tax from your pay at the highest rate. Give it to your bank too, or tax comes out of your interest at the top rate. To lodge yourself, you'll need a myGov account linked to the ATO.

If you're not a client yet and you'd like the team to look after your first Australian return, book a consultation with our team. Our tax accountants in Perth can work through it for your situation. If you're already a client and any of this sounds like you, just let the team know when you start your return.

The information in this article is general in nature and does not take into account your personal circumstances. It does not constitute specific tax or financial advice. Everyone's situation is different, so we recommend speaking with a qualified professional at Aevum Accounting before acting on anything you have read here.