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  • How much tax you pay

    The amount of tax you pay depends on:

    • how much you earn
    • whether you have a tax file number and have given it to your employer
    • whether you are an Australian resident for tax purposes
    • whether you have to pay the Medicare levy.

    Australian residents with a tax file number generally pay a lower rate of tax.

    If you are a foreign resident, generally you do not have to pay the Medicare levy, and you are not entitled to Medicare health benefits. If you are an Australian resident, you pay the Medicare levy when you lodge your tax return.

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    End of further information

    If your residency status changes during the year

    If your status has changed from foreign resident to Australian resident during the income year, answer 'yes' to the question on your tax return 'Are you an Australian resident?'. This way you are taxed at Australian resident rates for the tax year. Because you have been a foreign resident for part of the year, your tax-free threshold will be reduced.

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    Your tax-free threshold will be reduced if you are not in Australia for the full year:

    End of further information

    You will need to include in your tax return any foreign-source income you receive from the date you become an Australian resident. Do not include any foreign-source income you received before you became an Australian resident. From the date you cease to be an Australian resident, there is no need to disclose your foreign-source income in your tax return. Any Australian-sourced interest, dividends and royalties derived after you ceased to be an Australian resident are subject to the withholding tax provisions and should not be included in your tax return.

    To claim a tax offset for a dependent spouse, you must have both been Australian residents for at least part of the year. You will need to reduce your claim to take account of any period that your dependent spouse was not an Australian resident. The dependent spouse offset is not available for a spouse born on or after 1 July 1971.

    Foreign residents are not required to pay the Medicare levy. In your tax return you can claim the number of days in the income year that you are not an Australian resident as exempt days.

    • Last modified: 24 Dec 2013QC 33224