Information for payers of foreign residents working in the film industry
What obligations may apply when paying foreign residents?
A foreign resident is someone who is not an Australian resident for tax purposes.
If you pay a foreign resident for working in the film industry you may be required to withhold amounts from their payments under the pay as you go (PAYG) withholding system. You may also be required to pay super guarantee on top of their wages.
This information will assist all payers who make payments to foreign residents working in the film industry.
Terms we use:
- payer – an individual or entity who makes a payment
- payee – an individual or entity who receives a payment
- financial year – the period commencing 1 July and ending 30 June.
Payments subject to withholding
Foreign residents who are employees
You are required to withhold amounts when making payments to foreign residents working in the film industry as employees. The withholding requirements are similar to those that apply to Australian workers, however, a foreign resident:
- can't claim the tax-free threshold on the Tax file number declaration
- is subject to special rates of withholding detailed in the relevant tax tables.
Foreign residents who are not employees
You are required to withhold amounts from payments you make to foreign residents who are not employees for entertainment activities, including activities in the film industry. Withholding applies when the income is earned through activities undertaken in Australia.
Some examples of payments subject to foreign resident withholding include, but are not limited to, payments for:
- promotional or similar activity
- film production work.
Withholding will also apply to any per diem ('daily allowance') or other payments intended to cover the person’s costs of living while in Australia.
To help you determine if the worker is an employee or not an employee, refer to the Employee/contractor decision tool.
Support staff who are not employees
You may be required to withhold amounts from payments you make to foreign- resident support staff who are not employees for work in film production. Support staff includes, but are not limited to, a:
- costume designer
- director of photography
- film editor
- musical director
- personal trainer
- production designer
- set designer.
Exemption for some support staff
You are not required to withhold from payments to support staff in the entertainment field that are not employees and are:
- residents, for tax purposes, of a country with which Australia has an international tax agreement or tax treaties
- present in Australia for no more than 183 days in the financial year.
Payments to foreign agents, cast and crew
Payments to the following will be subject to foreign resident withholding if the film industry activities were undertaken in Australia:
- a foreign agent of an actor
- individual members of the cast or crew.
Actors will usually have a tax liability, regardless of the period of employment in Australia. But for support staff or crew who fall under a treaty, the 183-day rule mentioned above will apply.
Foreign resident withholding also applies to payments made by foreign entities to people carrying out film industry work in Australia – for example, when a foreign company pays people associated with filming in Australia. The foreign entity will have all of the obligations of a payer.
Payments to third parties
In some circumstances, you may have to make payments to an agent on behalf of a foreign resident. You should withhold from payments made to an agent as though the payment were made directly to the foreign resident – this is the case even if the agent is a resident in Australia.
If an agent receives a payment subject to foreign resident withholding on behalf of an overseas resident, and an amount has not already been withheld from that payment by the payer, the agent must withhold from the payment.
Note: You don’t need to withhold from payments made to entertainers and sportspersons who are residents of the United States if their gross income from working in Australia is less than $10,000 US.
You do not need to issue payment summaries to payees for these payments.