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  • When your employee is a foreign resident

    If your employee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

    There are two ways you can withhold from a foreign resident’s earnings:

    • If they have not given you a valid TFN, you need to withhold 45% for each $1 of earnings (ignoring any cents).
    • If they have given you a valid TFN, you need to withhold the amount calculated using the foreign resident tax rates below, rounding any cents to the nearest dollar.

    Foreign resident tax rates

    Monthly tax rates


    Monthly rate

    0 to 9,996

    32.5 cents for each dollar of earnings

    9,997 to 14,997

    $3,249 plus 37 cents for each $1 of earnings over $9,996

    14,998 and over

    $5,099 plus 45 cents for each $1 of earnings over $14,997

    Foreign residents cannot claim tax offsets to reduce withholding. If your foreign resident employee has claimed a tax offset on the Withholding declaration, don’t make any adjustments to the amount you withhold.

    Last modified: 13 Oct 2020QC 63812