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Employing Australians overseas

If you have Australian employees working overseas you generally have the same tax and super obligations as you would if they were working in Australia, though there are some important exceptions.

Last updated 15 February 2016

PAYG withholding and fringe benefits

If you make payments to Australian employees who are working overseas, you have the same tax obligations as you would if they were working in Australia, unless you’re satisfied that the employee’s income is exempt from tax in Australia.

If you post an Australian employee overseas, you need to:

  • continue withholding from payments of foreign income you make to them according to the Australian pay as you go (PAYG) withholding rules
  • issue them with a PAYG payment summary - foreign employment (NAT 73297) for the foreign income
  • meet any fringe benefits tax (FBT) obligations for any benefits you provide to your employee.

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Exempt payments

Some Australian employees working overseas are exempt from paying tax in Australia. These exemptions are specified by law and are typically for activities like overseas development, charity or security work.

If you are satisfied that an employee’s income is exempt from tax in Australia, you don’t have to withhold amounts from payments you make to them. The employee can apply for a private ruling from us on whether their income is exempt.

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You continue to have superannuation obligations when you send someone to work overseas, but bilateral superannuation agreements can prevent double superannuation coverage.

Under these agreements, you will be exempt from making compulsory super contributions in the country your employee is working in, provided you continue to meet compulsory super arrangements in Australia.

You can obtain a Certificate of Coverage from us for Australian employees sent to work temporarily in another country. You are then exempt from paying super contributions in the relevant foreign country.

For example, if you sent an employee to work temporarily in the United States of America, the US authorities may request that you provide a certificate of coverage to claim an exemption from their Social Security and Medicare taxes, which are otherwise payable on work undertaken in the US.

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