Calculate a zone or overseas forces tax offset

Zone tax offset eligibility

You may be able to claim a Zone tax offset if your usual place of residence is in a remote or isolated area of Australia, not including an offshore oil or gas rig.

Remote areas

Remote areas in Australia are divided into 2 zones called Zone A and Zone B. There are also special areas within the Australian zone list. You will need to work out which zone (A or B) or special area you are in, because different zone allowances apply to each of these areas.

From 1 July 2015, to be eligible for the zone tax offset your normal residence must be in an Australian zone.

Additional conditions

If your usual place of residence is in a remote area, you also need to meet the following conditions to qualify for a zone tax offset.

You must live in a remote area (not necessarily continuously) for either:

• 183 days or more during 2022–23, or
• 183 days or more during the period 1 July 2021 – 30 June 2023 (including at least one day in 2022–23) and you did not claim a zone tax offset in your 2021–22 tax return.

If you live in a zone for less than 183 days in 2022–23, you may still be able to claim a tax offset if you meet each of the following 3 conditions:

• You lived in a zone for a continuous period of less than 5 years after 1 July 2015.
• The total of the days you were there in the first year and in 2022–23 is 183 or more. The period you lived in a zone in 2022–23 must include 1 July 2022 (the first day of the income year).
• You could not claim a zone tax offset in that first year because you were there less than 183 days.

If you do not meet the above time conditions, you can't claim the zone tax offset.

A search facility of towns falling in Zones A and B, as well as the special areas in the zones, is available from Australian zone list.

Overseas forces tax offset eligibility

You may be eligible for an Overseas forces tax offset if you serve in a specified overseas locality as a member of the Australian Defence Force or a United Nations armed force in 2022–23, and income relating to that service is not specifically exempt from tax. Periods of service for which your income is exempt foreign employment income are excluded in working out your eligibility for the tax offset. Your employer can advise you whether you serve in a locality that qualifies for the overseas forces tax offset.

To claim the full tax offset, you must serve in the overseas locality for 183 days or more in 2022–23. Unlike the zone tax offset, you can't carry forward any unused days from previous years to make up 183. However, if your overseas service is less than 183 days, you may be able to claim part of the tax offset.

You may still be entitled to claim the full overseas forces tax offset if you serve in an overseas locality for less than 183 days and the total number of days served, when added to the number of days spent in one or more zones, is 183 days or more. If you served as a member of the Australian Defence Force, days spent in a zone must be defence force service.

If you qualify for both an overseas forces tax offset and a zone tax offset, you can only claim one of them. Claim the higher value offset.

Work out your zone or overseas forces tax offset

Find out about

• Fixed and base amounts
• Work out your tax offset if your circumstances are simple
• Work out your tax offset if your circumstances are complex

Fixed and base amounts

The zone or overseas forces tax offset is made up of the following:

• a fixed amount
• a percentage of your base amount.

The fixed amount is a prescribed amount available to all people in the zone or overseas area eligible for the tax offset.

You may also be able to include a base amount if you either maintain:

• a child under 21 or full-time student under 25
• an invalid or invalid carer (must be entitled to claim the invalid and invalid carer offset).

Your fixed and base amounts are determined by your circumstances.

Work out your tax offset if your circumstances are simple

Use the steps to work out your overseas forces tax offset.

Step 1

Your tax offset is the amount in Table 1 below if:

• you will live or work in only one zone or serve in only one specified overseas locality for at least 183 days and
• you are not able to include a base amount as you        
  • are not entitled to claim the invalid and invalid carer tax offset and
  • either do not have a dependent child or student at any time in 2022–23, or if you did have a dependent child or student, their adjusted taxable income (ATI) was equal to or greater than $282 plus $28.92 for each week you maintained them.
   

Table 1: Tax offset amounts

Offset	Amount
Zone A	$338
Zone B	$57
Special Area	$1,173
Overseas forces	$338

Child includes:

• your adopted child, stepchild or ex-nuptial child
• your child born or adopted in 2022–23
• a child of your spouse
• someone who is your child within the meaning of the Family Law Act 1975 (for example, a child who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement).

A student must be full-time at a school, college, or university.

If you can't use Table 1 you will need to work through How to work out your offset if your circumstances are complex.

If you receive a remote area allowance from Centrelink or the Department of Veterans’ Affairs you must reduce the amount of your zone tax offset by the amount you received for this allowance.

Step 2

If you are not entitled to an Invalid and invalid carer tax offset, write your tax offset amount less any remote area allowance at Question 7 on the Withholding declaration.

If you are entitled to an Invalid and invalid carer offset, transfer the amount of your Zone and overseas forces tax offset to B in Worksheet 8.

Work out your tax offset if your circumstances are complex

You can either use our Zone or overseas forces tax offset calculator or read below.

The following information will help you work out your base amount, if any.

Dependent child or student base amount for a full-year claim

Your base amount will include the maximum amount shown in Table 2 below for each student under 25 years old on 30 June 2023 in full-time education at a school, college or university, and for each child under 21 years on 30 June 2023 who, for the whole of 2022–23:

• is treated as an Australian resident
• is maintained by only you
• has an ATI of less than $286.

To calculate the ATI see Adjusted taxable income (ATI) for you and your dependants or use the Income tests calculator.

If you did not have any dependent children or students, go to Invalid and invalid carer base amount.

Table 2

Dependant	Base amount
Each student under 25 years old	$376
For the oldest non-student child under 21 years old	$376
Other non-student children under 21 years old	$282 for each child

If all of these requirements were met, add up the base amount for each child or student and write the total at a in Worksheet 4.

If 2 or more people will contribute to the maintenance of a dependent child or student, each person can only claim a proportion of the base amount.

If the requirements were met for only part of the year, or your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more, you may be able to claim for a part of the base amount. Read on.

Dependent child or student base amount for a part-year claim

You can claim only part of the base amount for dependent children or students if:

• the child or student is treated as an Australian resident for only part of 2022–23
• the student is under 25 years old and in full-time education for only part of 2022–23
• the child or student will be maintained by you for only part of 2022–23
• the child will be 21 years old at 30 June 2023 and not in full-time education, or
• the student will be 25 years old at 30 June 2023.

Use Worksheet 1 to work out the reduced base amount for each eligible dependent child or student as described in Table 2.

Worksheet 1

Row	Calculation	Amount
a	Maximum base amount for the child or student from Table 2	$
b	Number of days you maintained your child or student and your child or student was an eligible dependant	-
c	Number of days in 2022–23	365
d	Divide row b by row c	-
e	Multiply row d by row a	$

If the ATI of your child or student is less than $286 for the period you are claiming this base amount in respect of them, transfer amount e above to a Worksheet 4.

If you have more than one eligible child or student and the ATI of each one is less than $286 for the period you are claiming this base amount in respect of them, work out the amount for each child and student, add up all the amounts and write the total at a Worksheet 4.

If child or student's ATI is $286 or more for the period you maintain them

You cannot claim any base amount for your child or student if that child or student has an ATI equal to or greater than:

• the total of $282 plus $28.92 for each week you will maintain them for a student under 25 years old or for the oldest child under 21 years old who is not a student, or
• the total of $282 plus $21.70 for each week you maintain them for any other child under 21 years old who is not a student.

If your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more but less than the limits shown above, use Worksheet 2 to work out the base amount.

Worksheet 2

Row	Calculation	Amount
a	Base amount for the child or student from Table 2 or row e Worksheet 1 for a part-year claim.	$
b	Your child’s or student’s ATI for the period you maintained them.	$
c	Income above which the base amount begins to reduce.	$282
d	Take row c away from row b.	$
e	Divide row d by 4 because your base amount is reduced by $1 for every $4 of ATI over $282. Do not show cents.	$
f	Take row e away from row a. Show zero (0) if the amount is negative. Do not show cents.	$

Transfer the amount at f above to a Worksheet 4. If you have more than one eligible child or student, work out the amount for each child or student, add up all the amounts and write the total at a Worksheet 4.

Sole parent base amount

If you have sole care of a dependent child or student and you have written an amount of at least $1 at a Worksheet 4 (base amount for dependent children or students), you may also be eligible for a sole parent base amount.

You can only claim this base amount if you were a sole parent at any time during the income year and:

• your usual place of residence is in a remote area of Australia, or
• serve overseas as a member of the Australian Defence Force.

Sole care means that you alone had full responsibility on a day-to-day basis for the upbringing, welfare and maintenance of a child or student. We do not consider you to have had sole care if you were living with a spouse (married or de facto) during the year unless special circumstances exist.

You will need to use Worksheet 3 to calculate a part-year sole parent base amount claim.

Special circumstances if you had a spouse

If you have a spouse (married or de facto) at any time during 2022–23, you are entitled to a sole parent base amount only in special circumstances.

Generally, for special circumstances to exist, you must have been financially responsible for and have had sole care of the dependent child or student, without the support a spouse normally provides.

Examples of situations where special circumstances may arise:

• You were married or in a de facto relationship at any time during 2022–23, but during the year you separated from or were deserted by your spouse, and for the period that you will claim the sole parent base amount you were not in a de facto relationship.
• Your spouse is in prison for a sentence of at least 12 months.
• Your spouse is medically certified as being permanently mentally incapable of taking part in caring for your child or student.

If you are unsure whether special circumstances apply, contact us.

Shared or joint custody after a relationship breakdown

There are times, after a relationship breakdown, such as a divorce or separation, where both parents share the custody of a child or student. If you can show that you had sole care of a dependent child or student for part of the year, you may be able to claim the base amount for that part of the year. This means more than just having access visits with the child or student.

We consider you to have sole care of the child or student for the part of the year up to the day the child turned 21 years old, or the student turned 25 years old if the dependant:

• is not receiving full-time education and will turn 21 during 2022–23, or
• is a full-time student and will turn 25 during 2022–23.

You are only entitled to claim the base amount for that part of the year before the birthday.

If you have sole care of a child or student for the whole of 2022–23, write $1,607 at b in Worksheet 4.

Worksheet 3 – Sole parent base amount, part-year claim

Row	Calculation	Amount
a	Number of days you had sole care of a child or student.	-
b	Multiply row a by $4.40.	$

Transfer the amount at b above to b Worksheet 4.

Add any invalid and invalid carer base amount

If you determined in the previous section that you are entitled to an Invalid and invalid carer tax offset, you are also entitled to this base amount.

Write the amount you calculated at c Worksheet 4.

Work out your total base amount

Use Worksheet 4 to work out your total base amount.

Worksheet 4 – Total base amount

Row	Calculation	Amount
a	Dependent children or students, from Table 2.	$
b	Dependent children or students, from Worksheet 1.	$
c	Dependent children or students, from Worksheet 2.	$
d	Sole parent – full year.	$
e	Sole parent – part year from Worksheet 3.	$
f	Amount claimed at item T5 Invalid and invalid carer tax offset.	$
g	Add up all of these amounts.	$

The amount at d is your total base amount. Read on.

You use the information from Table 4 when you complete either Worksheet 5 or Worksheet 6.

Table 4

Category	Fixed amount	Percentage of base amount
Zone A	$338	50%
Zone B	$57	20%
Special area	$1,173	50%
Overseas forces	$338	50%

Final calculation for multiple locations

If you live or work in more than one zone, special area or specified overseas locality, and you will be in one of them for 183 days or more, check Table 4. If the fixed amount for that zone is higher than for the other zones where you will be, use that fixed amount and Worksheet 5 to work out your tax offset. This will give you the greatest benefit.

Otherwise go to Category 2.

Category 1

Category 1 applies if you are in only one zone or serve only in specified overseas localities for at least 183 days.

Step 1 is to complete Worksheet 5.

Worksheet 5

Row	Calculation	Amount
a	Your fixed amount from Worksheet 4.	$
b	Your base amount from row g on Worksheet 4.	$
c	Multiply row b by the percentage figure from Worksheet 4.	$
d	Add rows a and c. If you are claiming an overseas forces tax offset, the amount you can claim is row d. Go to Worksheet 8. If you are claiming a zone tax offset, read on.	$
e	Any remote area allowance you received.	$
f	Take row e away from row d and write the answer at row f.	$

The amount at f, if it is more than zero (0), is your zone tax offset. Go to Step 2.

Step 2 is:

• Write your zone or overseas forces tax offset amount at Question 7 on your Withholding declaration unless you are entitled to an Invalid or invalid carer tax offset.
• If you are entitled to an Invalid and invalid carer offset transfer the amount of your Zone and overseas forces tax offset to B in Worksheet 8.

Category 2

Category 2 applies if you:

• will live or work in more than one zone, or
• will serve in a specified overseas locality for less than 183 days, or
• will serve in a specified overseas locality and you will be in one or more zones for a total of at least 183 days.

You claim for the number of days in each eligible place divided by 183, to a maximum of 183 days for a year. Start with your zone that has the highest fixed amount in Table 4. This will give you the greatest benefit.

 

 

 

Step 1 is to use Worksheet 6 to work out your claim for each zone, special area or overseas locality you were in (as in the examples above).

Worksheet 6

Row	Calculation	Amount
a	Your fixed amount from Table 4	$
b	Your base amount from row g Worksheet 4	$
c	Multiply row b by the percentage figure from Table 4.	$
d	Add row a and row c.	$
e	Number of days your usual place of residence was in a zone or special area or you served in an overseas locality, to a maximum of 183 days (see the examples).	-
f	Multiply row d by row e.	$
g	Divide row f by 183. This is the amount you can claim.	$

Step 2 is, once you have worked out the amount you can claim for each place you were in, add up all the amounts and then use Worksheet 7 below to work out your total tax offset.

Worksheet 7

Row	Calculation	Amount
a	Total of the amounts you have worked out for each zone from row g Worksheet 6. If you are claiming an overseas forces tax offset, the amount you can claim is row a. Go to Worksheet 8. If you are claiming a zone tax offset, read on.	$
b	Any remote area allowance you received.	$
c	Take row b away from row a. This is the amount you can claim.	$

The amount at c, if it is more than zero (0), is the total of your zone tax offset.

If you are not entitled to an Invalid and invalid carer tax offset, transfer your amount from c to Question 7 on the Withholding declaration. Otherwise, go to Step 3.

Step 3 is to transfer your amount from c in Worksheet 7 above to B.

Worksheet 8

Item	Calculation element	Amount
A	Invalid and invalid carer tax offset (calculated from the previous section)	$
B	Zone or overseas forces tax offset	$
C	Total tax offsets Add A and B	$

Transfer your amount from C in Worksheet 8 above to Question 7 on the Withholding declaration.