Exempt foreign employment income

What if your foreign employment income is not exempt from tax?

Australian resident individuals are taxed on their worldwide income. This means you must include all foreign-source income in your income tax return. If you have paid foreign tax on this income, you may be entitled to a non-refundable foreign income tax offset for the foreign tax you paid.

If your Australian employer is still paying you while you are working overseas, they must withhold tax from any non-exempt foreign employment income. This also applies to any foreign employer that is registered for Australian pay as you go (PAYG) withholding.

If you are employed by a foreign employer that is not registered for Australian PAYG withholding, it is unlikely that any amount will be withheld for Australian tax purposes.