Show download pdf controls
  • Foreign employment income and section 23AG – employees

    If you work overseas continuously for 91 days or more and earned foreign employment income, this information may help you. This page covers the treatment of income tax and superannuation on your foreign income in Australia.

    On this page, 'foreign resident' is the same as 'non-resident'.

    Tax treatment of foreign employment income

    Australian residents for tax purposes are taxed on their worldwide income. So if you have foreign employment income, including salary, wages, commission, bonuses allowances or you receive non-cash benefits, you may need to include this in your tax return.

    If you have paid tax in another country, you may be entitled to claim a foreign income tax offset (FITO) in your Australian tax return. This will provide you with relief from double taxation.

    Foreign earnings derived on or after 1 July 2009, from foreign service performed on or after 1 July 2009, may be exempt from tax in Australia. The exemption for foreign employment income is limited to certain types of employment.

    Foreign employment income exemptions

    Section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936) sets out the types of foreign employment income eligible for exemption from income tax in Australia. Changes were made to section 23AG with effect from 1 July 2009 which limit the exemption. They apply where overseas employment includes 1 July 2009 and later.

    From 1 July 2016, Australian Government employees who earn foreign income while delivering Australian official development assistance (ODA) will not be eligible for exemption from Australian income tax on their foreign employment income.

    Members of a disciplined force, such as Australian Defence Force (ADF) and Australian Federal Police (AFP) delivering ODA will still be eligible for exemption from Australian income tax on their foreign employment income.

    Find out about:

    See also:

      Last modified: 06 Feb 2017QC 23115