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  • Pacific Australia Labour Mobility scheme

    If you have a Temporary Work (International Relations) subclass 403 visa to work in Australia under the Pacific Australia Labour Mobility (PALM) scheme, your employer will withhold tax from your pay. You may also need to lodge an income tax return in Australia each year.

    You, or your employer, can check your visa status using the Visa Entitlement Verification Online systemExternal Link.

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    Your residency for tax purposes

    For tax purposes in Australia, individuals will be either:

    Most workers who come to Australia under the seasonal PALM scheme are foreign residents for tax purposes.

    Workers who come to Australia under the long-term PALM scheme may be considered Australian residents for tax purposes.

    Whether you are a resident for tax purposes will depend on your circumstances.

    Tax and withholding in Australia

    Before you receive your pay, your employer will withhold tax. The amount they withhold depends on your residency status and how much you earn.

    Foreign resident workers

    Your employer will withhold tax at a flat rate of 15% on all payments made to you if:

    • you are a foreign resident for tax purposes
    • you work under the PALM scheme
    • your employer is an approved employer under the existing Seasonal Worker Program (SWP) deed of agreement.

    This tax is forwarded to us and you are not required to lodge a tax return if you don’t earn income from any other sources in Australia.

    Your program income is considered to be non-assessable, non-exempt income and you can't claim any deductions against this income.

    If your employer is not an approved employer, they will withhold tax at foreign resident rates and you will need to lodge a tax return.

    We are aware of proposed changes to taxation arrangements for the PALM scheme, however, these changes have not been passed by Parliament. This information will be updated as any new tax arrangements for PALM scheme workers become law.

    Example: foreign resident worker in the PALM scheme

    Langi comes to Australia for 8 months on a 403 visa. The visa is issued after 4 April 2022 under the seasonal PALM scheme to pick citrus in rural and regional locations. Langi is a foreign resident for tax purposes.

    Langi works at an orange farm in Griffith, New South Wales for an employer who is approved under the existing SWP. She is paid $26 per hour and guaranteed 10 hours for 6 days each week.

    As Langi is working for an approved employer under the PALM scheme, her employer will withhold 15% tax from her salary and wages. Her weekly salary is calculated as:

    • $26 per hour × 10 hours × 6 days = $1,560 per week

    Her employer withholds 15% tax: ($1,560 × 15%) = $234

    Langi’s take home pay each week is $1,326.

    Because Langi is a foreign resident working under a 403 visa in the PALM scheme, she is working for an employer who continues to be approved under the SWP, and she does not earn income from other sources in Australia, Langi is not required to lodge a tax return in Australia.

    End of example

    Australian resident workers

    Australian resident workers pay tax at the rate set out in the individual income tax rates. Your employer is required to withhold tax when they pay you. You are required to lodge a tax return.

    Example: Australian resident worker in the PALM scheme

    Aberto comes to Australia for 4 years on a 403 visa under the long-term PALM scheme to work in rural and regional locations. Aberto is an Australian resident for tax purposes.

    Aberto works at a vineyard in the Coonawarra region in South Australia, earning $37,000 per annum.

    As Aberto is an Australian tax resident, his employer will withhold tax from his salary and wages based on the resident tax rates.

    At the end of the income year, Aberto must lodge an income tax return. Assuming Aberto has no other income and no deductions, his tax liability for the 2021-22 income year is calculated as:

    • ($37,000 salary − $18,200 tax free threshold) × 19% tax rate = $3,572
    • Plus 2% Medicare Levy, being $37,000 × 2% = $740
    • Less a credit for the low income tax offset (LITO), being $700
    • Less a credit for the low and middle income tax offset (LMITO), being $255.

    The amount of tax Aberto will pay for the income year is $3,572 + $740 − $700 − $255 = $3,357.

    End of example

    Starting work in Australia

    Before you start work in Australia, you should:

    Apply for a tax file number

    If you plan to work in Australia, you need a tax file number (TFN). Your TFN is your personal reference number in our tax system.

    You can apply for a TFN online once you have your work visa.

    You don't have to have a TFN, but without one you pay more tax.

    Complete a TFN declaration for your employer

    When you start work, you give your employer a Tax file number declaration. This helps the employer work out how much tax to withhold from your pay.

    Your employer has to also pay superannuation for you if you are an eligible employee. They may also be required to pay fringe benefits tax if they provide you with any benefits in addition to your pay.

    Know your workplace rights

    Everyone working in Australia has the same workplace rights under the National Employment StandardsExternal Link (NES).

    The national minimum wage and NES make up the minimum employment entitlements that must be provided to all employees.

    The Fair Work Ombudsman provides information on workplace rights and entitlements for visa holders and migrant workersExternal Link.

    End of income year or finishing work

    At the end of the income year or when you finish working in Australia, consider if you need to:

    Access your income statement

    Your employer will usually provide an income statement through Single Touch Payroll (STP). It will show the amount you earned, tax withheld and superannuation that has been paid. You will be able to access and see your year-to-date tax and super information (income statement) in ATO online services through your myGov account from within Australia. If not, you can contact us.

    If your employer is not yet using STP they will provide you with a payment summary showing the payments you received and tax amounts withheld for the income year.

    Lodge a tax return

    The Australian income year starts on 1 July and ends on 30 June the following year.

    You don't need to lodge a tax return or a non-lodgment advice if you are a foreign resident for tax purposes and all of your income was earned as salary or wages while you were working under the PALM scheme.

    You will need to lodge a tax return if you are either:

    • a foreign resident for tax purposes and you earn income from sources in Australia in addition to the PALM scheme
    • an Australian tax resident.

    If you leave Australia permanently before 30 June, you can lodge your tax return early.

    Apply for a departing Australia superannuation payment (DASP)

    When you leave Australia and return to your home country, you can apply to have your super paid to you as a departing Australia superannuation payment (DASP).

    You can apply after you leave Australia if you meet all DASP requirements.

    Last modified: 04 Apr 2022QC 69194